Latest News | IOB Swings Back to Profit in March After 18 Quarters of Losses
Get latest articles and stories on Latest News at LatestLY. After being in red for 18 consecutive quarters, state-run Indian Overseas Bank (IOB) posted a standalone profit of Rs 144 crore in the quarter ended March, helped by lower provisioning for bad loans.
Mumbai, Jun 25 (PTI) After being in red for 18 consecutive quarters, state-run Indian Overseas Bank (IOB) posted a standalone profit of Rs 144 crore in the quarter ended March, helped by lower provisioning for bad loans.
The bank had reported a net loss of Rs 1,985.16 crore on a standalone basis in the same quarter of FY19, it said in a regulatory filing.
IOB, which is under the Reserve Bank of India's prompt corrective action (PCA) framework, had last posted profit in June 2016.
The bank's managing director and CEO Karnam Sekar said the bank made good recoveries and was able to contain fresh slippages during the quarter.
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"Because of this, we were able to arrest the credit cost which means provisions to be made were less and as a result we were able to post profit of Rs 144 crore. For 18 quarters, we were making losses only," Sekar said.
He said the profit is not a one-off and the bank will continue the trend.
Provision coverage ratio improved to 86.94 per cent as of March 31, 2020 as against 71.39 per cent a year ago.
After the June quarter results, the bank will write to RBI seeking exit from the PCA framework, Sekar said.
Nearly 32 per cent of the bank's customers have opted for moratorium on loan repayment as of May-end.
Net interest margin stood at 2.30 per cent in the quarter.
Gross non-performing assets (NPAs) stood at 14.78 per cent, while net NPAs were at 5.44 per cent.
Total fresh slippages stood at Rs 1,350 crore, while the bank recovered Rs 5,386 crore during the quarter.
Sekar expects recovery in the current fiscal to be around Rs 5,000-6,000 crore.
Total deposits increased to Rs 2,22,952 crore as on March 31, 2020 as against Rs 2,22,534 crore a year ago.
The bank reduced concentration of bulk deposits and high-cost deposits and increased retail term deposits to have a stable and sustainable deposit profile and reduce the cost of funds.
Gross advances stood at Rs 1,34,771 crore as on March 31, 2020 as against Rs 1,51,996 crore a year ago.
The bank had 772 branches in March 2014 which have reduced to 115 branches in March 2020.
The bank's scrip closed 10 per cent higher at Rs 11.99 apiece on the BSE on Thursday.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)