Indian Overseas Bank posts net profit of Rs 213 crore in December quarter

Indian Overseas Bank | File photo

State-owned lender Indian Overseas Bank (IOB) on Tuesday reported a net profit of Rs 212.87 crore for the quarter ending December 2020 as provisions for bad loans declined.

The bank had posted a staggering net loss of Rs 6,075.49 crore in the year-ago quarter. IOB had posted a net profit of Rs 148.14 crore for the July-September quarter of 2020-21.

Total income of the bank increased to Rs 5,786.51 crore during the October-December period of 2020-21 as against Rs 5,197.94 crore in the same quarter of 2019-20, IOB said in a regulatory filing.

Meanwhile, the Bank's management said that it did not hear anything from the government about putting the Bank on sale.

On whether the government is planning to sell IOB, Partha Pratim Sengupta, MD & CEO said "we cannot comment as we are not aware on whether we are in the block or not".

He added, during the third quarter, the Bank has done well and infused confidence in RBI. "Its a matter of time to come out from the PCA."

IOB plans to come out of Prompt Corrective Action (PCA) by focusing on recovery, low cost deposits and less capital consuming advances.

On the third quarter results, he said, the factors which have helped the Bank to report profit are capital infusion by the Government to the tune of around Rs 8,217 crore during the last fiscal, which has helped the provisions and to restart the business.

The Bank has also reduced corporate exposure by focussing on Retail, Agriculture, MSME (RAM), which now account to around 76 per cent of the Book.

During the beginning of the year, the Bank has set a target of recovering around Rs 1,000 crore, but due to Covid during the first quarter it was around Rs 200 crore, while during the second quarter it was Rs 760 crore and third quarter it was over Rs 1,550 crore and during the fourth quarter and coming quarters the run rate will continue.

On restructuring, he said, around Rs 3,000 crore or 2.5 per cent of the assets, is expected to be restructured.

He said around Rs 18,000 crore worth of NPAs are waiting for NCLT's resolutions


The bank's asset quality showed improvement with gross non-performing assets (NPAs) falling to 12.19 per cent of the gross advances by December 31, 2020, as against 17.12 per cent by the end of December 2019.

In value terms, gross NPAs were valued at Rs 16,753.48 crore, down from Rs 23,733.86 crore.

Similarly, net NPAs came down to 3.13 per cent (Rs 3,904.92 crore) from 5.81 per cent (Rs 7,087.09 crore)

Provisions for bad loans and contingencies fell to Rs 1,513.57 crore for the quarter from Rs 6,663.94 crore parked aside by the lender for year ago quarter.

Indian Overseas Bank shares closed 2.66 per cent down at Rs 11.36 apiece on BSE.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel