Indian Overseas Bank has reported a significant rise in its net profit at Rs.271 crore for the quarter ended June 30, 2014, when compared with Rs.126 crore in the year-ago period.
M. Narendra, Chairman and Managing Director of the bank, attributed the zoom in profit to lower provisions, good fund management and better recoveries, among others.
Higher profit has been achieved despite lower other income at Rs.278 crore in the first quarter of this year when compared with Rs.785 crore, which was boosted by a trading income of Rs.398 crore, he said
The operating profit of the bank stood at Rs.686 crore as against Rs.1,054 crore in the first quarter of previous fiscal. Provisions and contingencies were lower at Rs.299 crore as against Rs.843 crore in the year-ago period.
Gross advances grew by 6.25 per cent to Rs.1.77 lakh crore as on June 30, 2014, when compared with Rs.1.67 lakh crore as on June 30, 2013.
However, the bank saw some stress on asset quality with rising bad debts. Gross NPA (non-performing asset) ratio increased to 5.84 per cent as of June 30, 2014, from 4.98 per cent as of March 31, 2014, and 4.45 per cent a year-ago period.
Net NPA stood at Rs.6,644 crore as against Rs.4,580 crore in Q1 of 2013-14 with net NPA ratio of 3.85 per cent and 2.81 per cent, respectively.
“We have to focus on controlling NPAs and improving recoveries. This year, we are targeting total recoveries and upgradations of about Rs.3,000 crore. In Q1 of this fiscal, we recovered over Rs.540 crore as against Rs.388 crore in same period previous year,” said Mr. Narendra.
