IOB to follow PSU peers, sell non-core assets worth Rs 7 bn

In January the bank had set off accumulated losses with share premium amount, in an effort to spruce its balance sheet

Chennai-based public sector lender, Indian Overseas Bank (IOB), is likely to follow some of its peers and sell its non-core assets worth Rs seven billion this financial year.

The bank has been struggling with a huge non-performing asset base, which has been impacting its bottom line in the recent past.

According to sources, the bank is expected to sell non-core assets that are not in use at present, including commercial and residential properties. The sale, which would be effected through auctions, is likely bring in around Rs 7 billion to its books.

Earlier this week, Bank of India had said it is looking at raising some Rs 10 billion by selling some of its non-core assets including its properties and stakes in other companies. Other banks such as Allahabad Bank and Dena Bank have announced plans to sell off their non-core assets as part of monetisation.

In January, IOB had attempted to spruce its balance sheet by setting off accumulated losses with the share premium amount.

Its net loss has widened to Rs 9.19 billion during the quarter ended June 30, 2018, from Rs 4.99 billion during the same quarter last year, mainly owing to 60.80 per cent rise in provisioning year-on-year.

The total income grew three per cent to Rs 53.26 billion during the quarter, from Rs 51.74 billion a year ago.

The gross non-performing assets (NPA) during the first quarter of the financial year, grew to Rs 381.46 billion, or 25.64 per cent of total advances, from Rs 354.53 billion (23.60 per cent). Net NPA stood at Rs 196.41 billion (15.10 per cent) as against Rs 201.6 billion (14.9 per cent) during the same period last year.