IOB sees nearly four-fold jump in March quarter profit

Planned venture for banking software to be ready by September

Indian Overseas Bank posted an increase of 240 per cent in net profit for the fourth quarter ended March 31, 2011, at Rs 434.30 crore as against Rs 127.73 crore reported during the corresponding period of previous fiscal.

The total income stood at Rs 3,916.59 crore compared to Rs 2,829.50 crore posted during the same period of previous fiscal, an increase of 38.4 per cent.

Total business of the company grew 35 per cent during the full year of 2010-11 to Rs 2,59,020 crore, against Rs 1,91,577 crore posted during the previous fiscal.

The company targets the total business to be Rs 50,000 crore in the current fiscal and Rs 5,00,000 crore by 2013 or 2014, said M Narendra, chairman and managing director, IOB.

Software venture
Public sector bank Indian Overseas Bank (IOB) is planning to float its joint venture, to market its in-house software solutions to other banking firms, by September this year. The company also aims to open 800 new branches by the end of next year, along adding 3,500 more staff.

IOB has shortlisted five IT companies to freeze a partner for the joint venture and two technical consultancy firms, to guide it through the deal, said M S Raghavan, general manager, IOB. "We would freeze the partner from the list soon and target is to float the new company by September 30, 2011, subject to regulatory approvals," he said. It would use the support of consultancy firms for expertise in dealing with the IT firms.

With launch of the JV, it would also look at taking the solutions to overseas market. It has already received preliminary enquiries from Africa and some of the small banks in Europe. The aim is to sell the software and core banking solutions to co-operative banks in India and in Bangladesh and Europe, he added.

"We are in the process of selecting the consultant and also the partner," said M Narendra, chairman and managing director, IOB. The bank is also planning to introduce an image-based cheque clearing in Chennai soon. It would take up the new technology to all its branches across south India at a later stage, he added.

With around 2,200 branches at present, IOB is looking at adding 400 new branches each in 2011 and 2012. It would also set up 2,000 Automatic Telling Machines (ATMs) in an year's time. It has around 1,100 ATMs at present.

It would recruit around 1,500 clerks, 1,500 officers and another 525 specialist officers during the current fiscal, said Narendra. In the last two years, it has recruited around 3,500 people to the bank.

It has also launched Interbank Mobile Payment Service (IMPS), a real-time fund transfer facility through mobile phone, and an SMS-based customer grievance redressal system. IMPS is an alternative delivery channel for transfer and receipt of funds by IOB customers to and from customers of 19 other banks, which are presently members of National Payment Corporation of India.

The SMS-based grievance redressal system would offer the customer a reply to his complaint within half an hour from the regional bank official and the complaint would be addressed within short time, officials said.