IOB net soars 143% to Rs 350 cr in Q4; plans to raise Rs 2,000 cr

Chennai-based public sector lender Indian Overseas Bank (IOB) on Monday a reported a 143% jump in its net profit to Rs 350 crore for the fourth quarter of FY21, compared with Rs 144 crore in the corresponding quarter of the last fiscal year.
The bank has reported a total income of Rs 6,074 crore for Q4 as against Rs 5,537 crore in the same quarter previous financial year, registering 9.7% growth. The board of directors has approved a capital raising plan to the tune of Rs 2,000 crore. MD & CEO Partha Pratim Sengupta told media persons through a virtual meet that there has been good improvement, both QoQ and YoY, on all financial parameters.

“ If you look at the FY21 earnings performance, I would say it is a red-letter day for the bank, it has achieved an annual profit after the year 2014. In quarterly results, we have been making steady progress since March 2020, after making profit post being in the red continuously for 18 quarters,” he said.

Increase in other income, decrease in cost of deposits and profit from treasury operations have contributed to the profitability of the bank in the fourth quarter, according to him.IOB, which has been under prompt corrective action (PCA), has approached banking regulator RBI a couple weeks ago, with the plea to release the lender form the list of PCA. “We have fulfilled all the requirements which qualify the bank to come out of PCA. Now, it is up to the regulator to take a call on it,” Sengupta said.

The bank had been planing to come out of PCA by focusing on recovery, low-cost deposits and less capital consuming advances. He said the bank’s asset quality has improved significantly. Net NPA stood at 3.58%, which is within prescribed RBI guidelines.

During the quarter GNPA reduced by Rs 430 crore. GNPA ratios reduced to 11.69% from 14.78%, QoQ. The provision coverage ratio improved to 90.34%. The bank has made a recovery of Rs 3,934 crore in Q4 as against Rs 2,377 crore in the corresponding quarter last fiscal year. The bank’s interest income stood lower at Rs 4, 057 crore for the quarter as against Rs 4,442 crore while other income almost doubled to Rs 2,016 crore as against Rs 1,095 crore.
The capital adequacy ratio (CRAR) stood at 15.32% that includes capital inclusion of Rs 4,100 crore by the Centre in FY21.

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