IOB bottomline rises 22% to Rs 197 cr

BS 200 SCORECARD

Indian Overseas Bank has posted 22.34 per cent growth in net profit at Rs 197.22 crore for the third quarter ended December 2005 as against Rs 161.21 crore in the same period of the last financial year.

Total income of the Chennai-based public sector bank rose to Rs 1,303.31 crore from Rs 1,172.99 crore in October-December 2004.

The substantial growth is profits was possible due to increase in interest income backed by asset expansion and reduction in the cost of resources, T S Narayanasami, chairman and managing director, told reporters after the board meeting on Wednesday.

The interest income for the quarter under review rose by 13.56 per cent to Rs 1,143.34 crore from Rs 1,006.76 crore a year ago. The cost of deposit was brought down to 4.70 per cent despite hardening of interest rates, the CMD said.

The yield on advances improved from 8.74 per cent to 8.95 per cent. The net interest margin as a percentage to average earning assets improved to 4.02 per cent from 3.99 per cent.

Total business comprising advances and deposits rose by 18.45 per cent to Rs 81,142 crore (Rs 68,503 crore). Advances rose by Rs 6,411 crore to Rs 31,745 crore while deposits grew by Rs 6,228 crore to Rs 49,397 crore.

On the backdrop of the RBI's caution to banks to maintain vigil on the quality of assets, Narayansami said IOB is going slow on housing loan advances. Sensing steep rise in realty prices in certain pockets, RBI had raised risk weightage for housing and realty advances.

The capital adequacy of the bank declined to 13.14 per cent from 13.90 per cent a year ago due to growth in advances. The bank is adequately capitalised to meet Basel II norms.

IOB would hit the market with the Rs 250 crore tier-II bond issue before the end of this financial year.