State-run lender Indian Overseas Bank’s (IOB) net loss for the fourth quarter widened appreciably to ₹3,606.73 crore, from ₹646.66 crore a year earlier.
The loss was higher mainly due to provisioning requirements on account of the RBI’s revised framework for Resolution of Stressed Assets, the bank said in a statement. Additional provisioning for the latest quarter touched ₹3,155.20 crore.
Terming FY19 as a year of ‘recovery’, IOB managing director R. Subramaniakumar said the bank was planning to raise ₹1,500 crore in the current year towards regulatory capital adjustment and credit expansion.
In the quarter, IOB’s gross non-performing assets grew to ₹38,180 crore from ₹35,098 crore, with fresh slippage accounting for ₹3,629 crore. Net NPA stood at ₹20,400 crore (₹19,749 crore). The bank increased its provision coverage ratio to 59.45% from 53.63%, the bank added.
Recoveries improve
For the fourth quarter, IOB achieved a total recovery of ₹5,726 crore compared with ₹2,729 crore a year earlier, while total slippage stood at ₹9,868 crore.
IOB’s total income grew to ₹5,814 crore from ₹5,662 crore, registering a year-on-year growth of 2.68%, while total business dropped to ₹3,67,831 crore from ₹3,68,119 crore. Interest income rose 4.28% to ₹4,828 crore.
In the fourth quarter, total deposits increased 2.6% to ₹2,16,832 crore. To ensure stable deposit profile and reduce the cost of funds, IOB shifted its focus from bulk deposits to retail term deposits, the lender added.
Gross advances stood at ₹1,50,999 crore compared with ₹1,56,776 crore. IOB said it had rebalanced its credit portfolio with the share of Retail, Agri and MSME segment in total domestic advances improving from 58.74% to 64.82%.
The bank had a capital adequacy ratio of 9.25%.
For the full year, net loss climbed to ₹6,299.49 crore from ₹3,416.74 crore the previous year, mainly due to an increase in provision by ₹2,937 crore.
Centre’s capital infusion
IOB said that in the quarter ended March, the bank had received ₹4,694 crore as capital infusion by the Government of India as part of the recapitalisation plan for public sector banks, for which the bank allotted 203.82 crore shares for cash at a price of ₹23.03 per equity share (including premium of ₹13.03 per share).
This increased the Centre’s shareholding to 89.74%.
