Impact of increased provisioning and restructured accounts
Increased provision for bad and doubtful debts and restructured accounts pulled down the net profit of Indian Overseas Bank (IOB) to Rs.58.60 crore in the quarter ended March 31, 2013, from Rs.528.88 crore in the corresponding period of the previous fiscal.
For the whole of 2012-13, the net profit was Rs.567.23 crore, almost 46 per cent less as compared to Rs.1,050 crore in 2011-12.
Announcing the results at a press conference here on Monday, IOB Chairman and Managing Director M. Narendra said since many of the sectors had difficulty in maintaining their financial health quite a lot of accounts had come for restructuring. As a result, “we have to take incremental NPA (non-performing asset).”
The net NPA in the last fiscal went up to Rs.4,027.21 crore from Rs.1,907.44 crore as on March 31, 2012. The gross NPA increased to Rs.6,607.96 crore from Rs.3,920.07 crore.
Describing it as a performance in line with the industry growth and with the economy yet to recover, he said in the quarter under review, total income was Rs.5,897.89 crore, a growth of 8.92 per cent against Rs.5,415.09 crore.
The net interest margin was 2.30 per cent.
In the full fiscal, the bank registered a total business of Rs.3,66,501 crore, a year-on-year growth of 13.92 per cent and a total income of Rs.22,649.63 crore, which was 15.69 per cent more than Rs.19,578.13 crore recorded in the year ended March 31, 2012.
With regard to capital infusion, he said IOB had requested the Centre for Rs.1,500 crore and got Rs.1,000 crore. It hoped the government would infuse more capital this fiscal.
On plans to raise long-term funds, Mr. Narendra said the bank had got approval to go up to $2 billion in international borrowings. Of this, it had twice raised medium term notes (MTN) of $500 million each. The rest was likely to be raised in four tranches over the next one-and-half year, he said, adding the timing would depend on “ripe corporate credit appetite.”
The board of directors had recommended a dividend of Rs.2 per share of Rs.10 each for 2012-13.
The dividend in the previous fiscal was Rs. 5 per share. Stating that the net profit would increase in the long-term, Mr. Narendra said the bank would continue its focus on retail credit growth, add more CASA (Current Account Savings Account) and enhance recovery.