IOB posts PBT of Rs 125 cr in Q1 against Rs 330 cr loss a year ago

Lender said it is in a position to come out of Prompt Corrective Action since NPAs have come down drastically and the bank has started reporting profit

Indian Overseas Bank (IOB) has reported a profit before tax (PBT) of Rs 124.63 crore during the quarter ended June 30, 2020 as against a Rs 329.66 crore loss a year ago. 

The lender said that it is in a position to come out of Prompt Corrective Action (PCA) since NPAs have come down drastically and the bank has started reporting profit.

IOB's operating profit for the quarter ended June 2020 was Rs 1,094 crore as against Rs 828.15 crore for the quarter ended June 30, 2019.

Treasury gains, increase in interest on investments, reduction in interest expenditure have helped the bank report profit, said Partha Pratim Sengupta, its Managing Director & Chief Executive Officer.

Provisions and Contingencies for the quarter were Rs 970 crore as against Rs 1,170.24 crore for quarter ended June 2019. 

Gross NPAs as on June 30, 2020 stood at Rs 18,291 crore with a ratio of 13.9 per cent this June, as against Rs 33,262 crore with ratio of 22.53 per cent as on June 30, 2019.  Net NPAs were Rs 6,081 crore (5.1 per cent this June), as against Rs 14,174 crore (11.04 per cent a year ago). 

Total recoveries of Rs 1,991 crore were achieved for the quarter ended June 2020 as against Rs 2,238 crore a year ago,  while total fresh slippage (other than debits to existing NPA accounts) for the reporting quarter stood at Rs 257 crore. 

"We hope to come out of PCA soon. We will approach RBI after assessing the impact of Covid," said Sengupta, adding that the lender is planning to recover around Rs 1,000 crore every quarter.

Sengupta, who recently took over as MD & CEO of IOB, said his immediate focus will be digitalisation, MSMEs and containment of  NPAs.