Indian Overseas net up 26% to Rs 250 cr

Supported by a substantial increase in interest income from advances, Indian Overseas Bank registered 25.87 per cent increase in net profit for the September quarter at Rs 249.85 crore compared with Rs 198.49 crore a year ago.

Total income rose 21.89 per cent to Rs 1,524.13 crore for the July-September 2006 quarter compared with Rs 1,250.32 crore. Interest income from advances grew 47.27 per cent to Rs 939.21 crore in Q2 quarter from Rs 637.72 crore, chairman and managing director T S Narayanasami said.

Though treasury income fell by Rs 60 crore to Rs 9 crore for the second quarter, the fee-based income showed a 35.46 per cent increase at Rs 142.08 crore from Rs 104.88 crore a year earlier.

Interest income was up 27.54 per cent to Rs 1,372.12 crore from Rs 1,075.76 crore a year earlier. However, interest expenses also grew 36.12 per cent to Rs 760.21 crore from Rs 558.46 crore. The net interest income (NII) was up 18.29 per cent to Rs 612 crore from Rs 517.4 crore.

Total deposits rose 20.31 per cent to Rs 57,018 crore at the end of September, while advances were up 40.28 per cent to Rs 41,141 crore over the same period. The low cost deposits -the current account and savings account (CASA) ratio - stood at 37.66 per cent.

"CASA alone cannot take care of resource mobilisation. The low cost deposits cannot cannot keep pace with credit growth and while focusing on trying to bring down costs, dependence on bulk deposits cannot be dispensed with," he said.