Chief executive Partha Pratim Sengupta expects the bank to double its annual net profit over that of FY21’s Rs 831 crore. “We are on our way to doubling it,” Sengupta said after announcing the quarterly numbers.
Its net interest margin, a key parameter to gauge profitability, however, fell a shade to 2.34 per cent from 2.36 per cent.
On the stress building upon small and medium enterprise units following the second wave of the pandemic, Sengupta said that the bank’s provisions against standard assets are three times more than the regulatory requirement. “We are not isolated from the economy. But we are well protected from the possible downside.”
Its provision coverage ratio is as high as 91.56 per cent, improved from 90.3 per cent three months back. It has restructured loans worth Rs 4300 crore while other Rs 3000 crore of loans are in the restructuring pipeline.
The lender booked fresh slippages of Rs 1158 crore while it wrote off loans to the tune of Rs 793 crore.
Its operating profit rose 9.9 per cent at Rs 1202 crore from Rs 1094 crore over the same period on account of reduction in interest expenditure. Other income which includes gains from treasury rose 17 per cent at Rs 1092 crore from Rs 932 crore.
IOB made cash recovery of Rs 1113 crore against Rs 275 crore in the year-ago period. The bank has set an annual recovery target of Rs 4000 crore.
Asset quality improved with gross non-performing assets ratio falling to 11.48 per cent at the end of June quarter from 13.90 per cent a year ago.
The bank’s gross advances rose to Rs 1.39 lakh crore from Rs 1.32 lakh crore even as it decided not to take fresh exposures on the stressed sectors, and lower-rated accounts.
