Indian Overseas Bank (IOB) has reported a substantial increase in loss before tax of Rs 5,901.6 crore during the quarter ended December 31, 2019 as against Rs 609.14 crore, a year ago. The Bank attributed a high provision of Rs 5,564 crore towards NPAs for the high loss figure.
IOB's total income declined 8.6 per cent to Rs 5,197.94 crore during the quarter from Rs 5,688.59 crore during same period last year. Its total business stood at Rs 3,59,933 crore as on December 31, 2019 as against Rs 3,70,901 crore a year ago.
Gross NPAs of the bank came down in December 31, 2019 to Rs 23,733.86 crore with ratio of 17.12 per cent, from Rs 35,787 crore (ratio: 23.76 per cent) as on December 2018. Net NPAs declined to Rs 7,087.09 crore (5.81 per cent) from Rs 17,987.92 crore (13.56 per cent) during same period last year, due to provisions made during the quarter. This is less than six per cent prescribed by the Reserve Bank of India.
The Bank has been striving to bring down net NPAs below six per cent, in order to come out of the Prompt Corrective Action (PCA) imposed on it by the Banking regulator. The lender says it plans to come out of PCA by focusing on recovery, low-cost deposits and less capital consuming advances.
The Central Government has infused Rs 4,360 crore during the quarter ended December 2019. The bank's CRAR stands at 10.43 per cent post infusion of capital. The provision coverage ratio improved to 86.20 per cent compared to 64.23 per cent during same period last year, it added.
Total recovery, including technically written-off accounts rose to Rs 7,085.04 crore for quarter ended December 2019 from Rs 3,723 crore during the quarter ended December 2018, while total fresh slippage for quarter ended December 20l9 stood of Rs 1,647.82 crore. Recovery was higher than slippages during the quarter mainly dueto focused priority action on arresting slippages and improving recovery in NPA/OTS occounts, said the Bank.