Indian Overseas Bank posts net profit of Rs 213 crore in December quarter

The firm posted a net profit of Rs 212.87 crore for the quarter ending December 2020 as provisions for bad loans declined

State-owned lender Indian Overseas Bank (IOB) on Tuesday reported a net profit of Rs 212.87 crore for the quarter ending December 2020 as provisions for bad loans declined.

The bank had posted a staggering net loss of Rs 6,075.49 crore in the year-ago quarter. IOB had posted a net profit of Rs 148.14 crore for the July-September quarter of 2020-21.

Total income of the bank increased to Rs 5,786.51 crore during the October-December period of 2020-21 as against Rs 5,197.94 crore in the same quarter of 2019-20, IOB said in a regulatory filing.

Meanwhile, the Bank's management said that it did not hear anything from the government about putting the Bank on sale.

On whether the government is planning to sell IOB, Partha Pratim Sengupta, MD & CEO said "we cannot comment as we are not aware on whether we are in the block or not".

He added, during the third quarter, the Bank has done well and infused confidence in RBI. "Its a matter of time to come out from the PCA."

IOB plans to come out of Prompt Corrective Action (PCA) by focusing on recovery, low cost deposits and less capital consuming advances.

On the third quarter results, he said, the factors which have helped the Bank to report profit are capital infusion by the Government to the tune of around Rs 8,217 crore during the last fiscal, which has helped the provisions and to restart the business.

The Bank has also reduced corporate exposure by focussing on Retail, Agriculture, MSME (RAM), which now account to around 76 per cent of the Book.

During the beginning of the year, the Bank has set a target of recovering around Rs 1,000 crore, but due to Covid during the first quarter it was around Rs 200 crore, while during the second quarter it was Rs 760 crore and third quarter it was over Rs 1,550 crore and during the fourth quarter and coming quarters the run rate will continue.

On restructuring, he said, around Rs 3,000 crore or 2.5 per cent of the assets, is expected to be restructured.

He said around Rs 18,000 crore worth of NPAs are waiting for NCLT's resolutions

The bank's asset quality showed improvement with gross non-performing assets (NPAs) falling to 12.19 per cent of the gross advances by December 31, 2020, as against 17.12 per cent by the end of December 2019.

In value terms, gross NPAs were valued at Rs 16,753.48 crore, down from Rs 23,733.86 crore.

Similarly, net NPAs came down to 3.13 per cent (Rs 3,904.92 crore) from 5.81 per cent (Rs 7,087.09 crore)

Provisions for bad loans and contingencies fell to Rs 1,513.57 crore for the quarter from Rs 6,663.94 crore parked aside by the lender for year ago quarter.

Indian Overseas Bank shares closed 2.66 per cent down at Rs 11.36 apiece on BSE.