Indian Overseas Bank has reported a 17 per cent rise in its total business in the second quarter ended September 30, 2009 to Rs. 187,853 crore from Rs. 160,514 crore in the year-ago period. While deposits grew by 20.54 per cent to Rs. 109,435 crore from Rs. 90,787 crore, advances registered a growth of 12.5 per cent to Rs. 78,418 crore from Rs. 69,727 crore as on September 30, 2008.
Addressing presspersons here on Thursday, S. A. Bhat, Chairman and Managing Director, said total income for the three months under reference rose by 7.82 per cent to Rs. 2,922.34 crore from Rs. 2,710.48 crore. While interest income rose by 5 per cent to Rs. 2,549.95 crore from Rs. 2,427.03 crore, non-interest income recorded a healthy growth of 31.4 per cent to Rs. 372.39 crore from Rs. 283.45 crore, because of increased revenues from treasury operations and from corporate and wholesale banking, Mr. Bhat said. The operating profit declined by 7.8 per cent to Rs. 554.61 crore from Rs. 601.40 crore.
Mr. Bhat said following the takeover of specific assets and liabilities of Shree Suvarna Sahakari Bank of Pune in May, the Reserve Bank of India had permitted IOB to absorb the deficit representing excess of liabilities over assets amounting to Rs. 246.52 core over a three-year period. The bank had adjusted one-third of the deficit amounting to Rs. 82.17 crore in the operating profit and the balance of deficit amounting to Rs. 164.35 crore would be absorbed before March 31, 2012, he said. The takeover also resulted in a setback on the NPA front of IOB as the gross NPA stood at Rs. 2,685 crore against Rs. 1,725 crore.
The higher tax provision of Rs. 174.36 crore (Rs. 63.35 crore) also had resulted in a decline in net profit to Rs. 176.04 crore from Rs. 359.02 crore.
The bank is taking steps to curb further additions to NPAs.