Indian Overseas Bank Net 187%

The city-based-Indian Overseas Bank (IOB) has posted an impressive growth of 187 per cent in its net profit for the year ended March 31, 2001, at Rs 115.62 crore compared with Rs 40.34 crore achieved during previous year ended March 31, 2000.

Addressing mediapersons here in Chennai, S C Gupta, chairman and managing director of IOB, said effective control on cost of deposit and effective utilisation thereof, coupled with recovery of Rs 270 crore of non-performing assets (NPAs) were reasons for increase in profitability. The net profit margin increased from 2.52 per cent to over 3 per cent during last year.

Total income during last fiscal 2000-01 was at Rs 3,095.83 crore including Rs 302.41 crore from non-interest income as against Rs 2,770.75 crore earned during previous fiscal, an increase of 11.73 per cent.

Outlining the bank's strategy during current fiscal, he said, "We are anticipating an incremental growth of Rs 4,600 crore from deposits and Rs 2,200 crore from advances, a growth of more than 18 per cent. To further reduce the cost, we expect to mobilise Rs 1,500 crore worth of deposits under the savings bank account."

The other major focus of the bank would be to increase the share of fee-based or non-interest income in the total income and also to increase advances under retail financing.

Consequent to the introduction of voluntary retirement scheme, more than 3,200 employees out of 3,900 employees have left IOB by May 31, 2001. The total outgo due to the VRS scheme would be around Rs 400-500 crore, Gupta said.

Following RBI's revised guidelines for one-time settlement of NPAs, Gupta said that IOB was able to reduce its gross NPA to 11.81 per cent as against 13.18 per during previous fiscal.

The net NPA has also dropped marginally to 7.01 per cent from 7.65 per cent. IOB had planned to reduce it further to around 6.25 per cent by March 31, 2001, he said.

It may be noted that in last September, the bank raised around Rs 111.20 crore through its initial public offering (IPO) by offloading 25 per cent of government equity.