The net profit for the period stood at Rs 376.4 crore as against Rs 148 crore in the year-ago quarter.
Net interest margin (NIM), a key profitability parameter, was at 2.43 per cent, lower than 2.57 per cent seen in the year-ago period.
“NIM is likely to be around this level as the market becomes too competitive with all large banks lowering interest rates. We are trying to combat this with a renewed focus on mobilizing low-cost CASA (current and savings account) deposits,” IOB chief executive Partha Pratim Sengupta said Wednesday, responding to a query from ET.
He expects treasury income to boost earnings in the next quarter as the higher government spending is likely to drive bond yields down.
The bank earned Rs 4254 crore of interest income during the quarter ending September 30, 2.5 per cent lower as compared with Rs 4,363 crore earlier. Its total income fell 1 per cent to Rs 5376 crore from Rs 5431 crore over the same period.
Its CASA improved to 42.57 per cent as against 40.26 per cent earlier.
Operating profit rose 5.4 per cent at Rs 1,419 crore for the September quarter as against Rs 1,346 crore in the year-ago period, riding on 5 per cent higher other income at Rs 1121 crore. Total provisions fell to Rs 1036 crore from Rs 1193 crore even as provisions against bad loans rose to Rs 885 crore from Rs 737 crore over the same period.
The bank’s asset quality improved with the gross non-performing assets ratio falling to 10.66 per cent at the end of the quarter from 13.04 per cent a year back. Net NPA stood at 2.77 per cent as against 4.3 per cent. It made cash recovery of Rs 832 crore from bad loans, written off accounts and investments during the quarter including Rs 291 crore from Dewan Housing Finance Corporation.
IOB’s gross advances rose 8.5 per cent year-on-year to Rs 1.47 lakh crore. The bank, which has exited the Reserve Bank of India’s restrictive prompt corrective action framework with last months by showing improvement in asset quality, capital position, leverage and turning profitable for FY21, has decided against taking fresh exposures in stressed sectors and lower-rated accounts.
It has however started hiring after a gap of half-a-decade and is redrawing its manpower policy in step with the focus on digital banking offerings.
