Indian Overseas Bank Q1 net more than doubles

Bank plans to raise Rs 3,500 cr via QIP, rights issue

Indian Overseas Bank has posted a net profit of Rs 271.7 crore for the quarter ended June 30, 2014 as compared to Rs 125.7 crore for the quarter ended June 30, 2013. Total income has increased from Rs 6,187.1 crore for the quarter ended June 30, 2013 to Rs 6,284.6 crore for the quarter ended June 30, 2014.

The bank's gross NPA was at Rs 10,350.83 crore as compared to Rs 7,431.89 crore - in percentage terms it increased to 5.84 per cent from 4.45 per cent.

Net NPA was Rs 6,643.62 crore as compared to Rs 4,580.40 crore and as percentage it increased to 3.85 per cent from 3.20 per cent.

The provision coverage ratio stood at 52.85 per cent as on June 30. The capital adequacy ratio of the bank under tier-II Basel III was at 7.40 per cent and under tier III was at 3.21 per cent.

QIP, rights issue

The bank has said that it would look at raising Rs 3,500 crore through QIP or a rights issue. "We have already appointed a merchant banker for the proposed QIP," said M Narendra, chairman and managing director, Indian Overseas Bank.

When the market improves, the bank would look at QIP and a rights issue and is also planning to seek around Rs 1,200 crore from the government, said Narendra.

On performance, he said that despite NPA constraints and sluggish growth in advances, the bank managed to report growth in profit. The growth in profit was mainly due to operational efficiency, fund management and improvement in branch-level profit, he said.