IOB Q4 net up 241% at Rs 434 cr

Chennai-based public sector lender Indian Overseas Bank today reported a massive 240.78%spurt in its fourth quarter net profit at Rs 434.3 crore, driven by a massive dip in stressed assets and an improvement in net interest margin.

"We have been able to post good numbers as our efforts at bringing down non-performing assets bore rich fruits. We could also raise our net interest margin by increasing operational efficiencies," Chairman and Managing Director M Narendra told reporters here.

On the outlook for the bank in the new fiscal, Narendra said, "Going forward, the bank will focus on increasing the share of current and savings accounts (Casa) deposits, besides further bringing down stressed loans.

Gross NPA is expected to be Rs 2,000 crore for this year(against Rs 3089 cr in FY11) and the target for Casa is 35%, up from the present 30 per cent".

In the March quarter last fiscal, the bank had reported a net profit of Rs 127.44 crore.

He also said, the bank will soon hike lending rate by at least 50 bps following the RBI action yesterday, but ruled out any upward revision in deposit rates saying the rates have already peaked.

During the year, IOB restructured Rs 6,900 crore loan, he said, adding but none from the troubled micro finance sector, where the bank has an exposure of Rs 400 crore. During the year, the bank saw fresh NPA accumulation of Rs 454 crore, primarily from the large corporates.

During the reporting quarter, the bank saw its net interest margin rising to 3.16% from 2.72%, while its net interest income rose 48.13 per cent to Rs 1,215.28 crore from Rs 820.41 crore yoy.