State-owned Indian Overseas Bank is exploring options to raise funds through a follow-on public offer (FPO) during the next financial year.
The bank was comfortable after the recent capital infusion of ₹4,360 crore, but raising money through FPO is on the cards. “We plan to raise funds through FPO probably during the second quarter of the next fiscal,” IOB’s executive director Ajay Kumar Srivastava said.
In an informal chat with reporters here on Monday, he said the bank was in the process of improving performance in terms of controlling net non-performing assets. It had successfully brought down net NPAs during the last quarter ended December 31 as compared to the year earlier period.
In quantitative terms, the net NPAs, which were around ₹17,000 crore in December 2018, had been brought down to ₹7,000 crore by the end of third quarter this fiscal. The net NPA was at 5.8%, below the 6% stipulated by the RBI. “We expect to clock net profit by the end of the fourth quarter and request the regulator to bring us out of the prompt corrective action framework which intends to help financially weak banks back to health before going for the FPO,” he said.
IOB’s net interest margin was currently about 1.94% and it was expected to touch the 2% level by the end of the current quarter. He, however, said it would take another three to four quarters for reaching 3% NIM. He said the Centre held nearly 95% of the stake in the bank and LIC had another 2%.
