Plans to raise $500 m through medium term notes
Indian Overseas Bank (IOB), on Saturday, reported a net profit of Rs.528.81 crore for the fourth quarter ended March 31, 2012, up from Rs.434.30 crore in the same period in the previous year. This represents a rise of 21.76 per cent.
Total business for the quarter under review grew by 7.39 per cent to Rs.3,21,707 crore (Rs.2,99,555 crore). Total income grew by 38.26 per cent to Rs.5,415.09 crore (Rs.3,916.58 crore). Net interest income rose to Rs.1,340.58 crore (Rs.1,215.28 crore). Interest on advances stood at Rs.3,740.56 crore (Rs.2,615,64 crore).
Notwithstanding a big jump in the final quarter net profit, the bank reported a lower annual net profit of Rs.1,050.13 crore (Rs.1,072.54 crore). Addressing a press conference here, M. Narendra, Chairman and Managing Director, said the bank had to make a substantial provision during the year. The total business grew by 24.20 per cent to Rs.3,21,707 crore in 2011-12, up from Rs.2,59,020 crore in the preceding year. Interest income stood at Rs.17,897.08 crore (Rs.12,101.46 crore). Gross NPA (non-performing assets) stood at Rs.3,920.07 crore at the end of March 2012 against Rs.3,089.59 crore as at March 2011. The gross NPA ratio was marginally up at 2.74 per cent (2.72 per cent). The net NPA was placed at Rs.1,907.44 crore (Rs.1,328.42 crore).
Fielding a range of questions, Mr. Narendra said 2011-12 was a difficult year and saw the Central Government infuse Rs.1,440 crore equity into the bank. Further, Life Insurance Corporation, too, brought in Rs.302 crore. With these fund infusion, the government's stake in the bank stood at 69 per cent and that of LIC at 12 per cent, he said. Despite the tough economic conditions, he was confident that IOB could achieve a 20 per cent growth in deposits and advances in the current year. He asserted that the bank would focus more on ‘profit and profitability'. In this context, he said that the thrust would be on improving CASA (current account savings account) ratio, beefing up recovery and improving cost efficiency. To a specific query, he said agriculture and SME (small and medium enterprise) could be target sectors to grow business. Retail lending too offered scope for growth, he pointed out.
$500 m MTN issue
Mr. Narendra also indicated that the bank could consider raising $500 million in overseas money through an MTN (medium term notes) issue like it did last year. He also hinted that the bank would revise the FCNR (B) deposit rates, now that the RBI had come out with fresh guidelines.
The Chairman and Managing Director also informed presspersons that IOB had moved the apex bank for upgrading its branches in China, Vietnam and Dubai.
Keywords: IOB Q4 results