Public sector lender Indian Overseas Bank on Wednesday reported a 58% jump in its net profit at ₹552 crore in the quarter ended March 2022, aided by lower provisioning for bad loans and better recoveries.
The bank had reported its profit after tax of ₹350 crore in the corresponding quarter of FY21.
For the full financial year 2021-22, the bank’s net profit doubled to ₹1,709 crore from ₹831 crore in the preceding fiscal.
“We had to make lower provisions with respect to our bad and doubtful assets. We have kept our provisions very strong, so whatever recoveries we had made got added back to our profit,” the bank’s managing director and CEO Partha Pratim Sengupta told reporters.
He said the bank had targeted cash recoveries of ₹4,000 crore from NPA (non-performing asset) accounts and technically written-off accounts in FY22, and achieved cash recoveries of ₹4,200 crore.
lnterest income stood at ₹4,215 crore for the quarter ended March 31, 2022 as against ₹4,057 crore last year.
Net interest margins improved to 2.41% from 2.22% in the year-earlier quarter.
Gross NPA stood at ₹15,299 crore with ratio of 9.82% as against ₹I6,323 crore with ratio of 11 .69% as of March 31, 2021.
Net NPAs stood at 2.65% as against 3.58% in the year-earlier quarter.
Slippages during the quarter were ₹981 crore, compared with ₹2,841 crore a year earlier.
The bank’s provision coverage ratio improved to 91.66% as on March 31, 2022 from 90.34% in the previous year.
Gross advances stood at ₹1,55,801 crore in the quarter under review as against ₹1,39,597 crore in the year-earlier period.
The bank has adopted a policy of not taking fresh exposures in the stressed sectors, below hurdle rated accounts with BB and below ratings.
It has also exited from accounts in the stressed sectors, wherever feasible.
Mr. Sengupta said the bank is doing a thorough risk analysis and risk mitigation in the corporate loan account where it is taking exposure.
The lender is expecting a loan growth of 12% in the current financial year.
Its capital adequacy ratio stood at 13.83%. The lender will be looking at raising ₹1,000 crore in equity in the current financial year, Mr. Sengupta said.
The bank’s scrip ended at ₹17.50 apiece, up 2.94% on the BSE.
