Indian Overseas Bank narrows net loss to Rs 342 cr in June quarter

State-owned Indian Overseas Bank (IOB) on Tuesday reported narrowing of its net losses to Rs 342.08 crore in the first quarter ended June 30.

Reduction in net loss was mainly due to lower provisioning and improved recovery, IOB said.

The Chennai-based lender had posted a net loss of Rs 919.44 crore during the corresponding quarter of the previous financial year.

Its total income fell 6 per cent to Rs 5,006.48 crore in the three months to June of 2019-20 as compared with Rs 5,326.71 crore in the year-ago period, the lender said in a regulatory filing.

The bank's interest income grew 2.07 per cent to Rs 4,336.39 crore during the quarter, however, the non-interest income was down by 38 per cent to Rs 670.09 crore.

Even as the bank brought down its bad asset ratio, it remained elevated with the gross non-performing assets (NPAs) standing at 22.53 per cent (Rs 33,262 crore) of the gross advances at the end of June 2019, as against 25.64 per cent (Rs 38,146 crore) a year ago.

Net NPAs or bad loans were 11.04 per cent (Rs 14,174 crore), down from 15.10 per cent (Rs 19,642 crore).

A fall in NPA proportion led to lowering in NPA provisions and contingencies at Rs 1,170.24 crore for the first quarter ended June, compared with Rs 2,051.03 crore parked aside for the corresponding period a year ago.

IOB said it made a total recovery of Rs 2,238 crore during the June quarter, as against Rs 3,389 crore a year ago, while the total fresh slippage (other than debits to existing NPA accounts) stood at Rs 2,050 crore.

"Recovery achieved is higher than slippages during the quarter mainly due to focused efforts towards recovery. The bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts," the bank said.

IOB said it has also exited from accounts in stressed sectors and has rebalanced its credit portfolio with focus on RAM -- retail, agriculture and MSME (micro, small and medium enterprises).

Its total business stood at Rs 3.69 lakh crore as on June 30; total deposits were Rs 2.21 lakh crore.

Gross advances stood at Rs 1.47 lakh crore by the end of the June quarter, down from Rs 1.51 lakh crore a year ago, as part of consolidation and reducing concentration risk, the lender said.

Shares of the bank traded at Rs 11.74 on the BSE, a rise of 0.26 per cent from the previous close.