Indian Overseas Bank Q2 result: Profit surges 61% to record ₹1,259 cr

Indian Overseas Bank's quarterly profit jumped 61 per cent to ₹1,258.82 crore, its highest ever, driven by robust interest income, strong lending growth, and lower NPAs

Chennai-based Indian Overseas Bank (IOB) has reported a 61 per cent year-on-year rise in net profit for the second quarter of the current financial year to an all-time high of ₹1,258.82 crore, compared with ₹779.61 crore in the July–September quarter of FY25, driven mainly by higher interest income and improved asset quality.

 

The bank’s total operating income rose 15 per cent to ₹7,850.89 crore for the quarter ended September 2025, against ₹6,853.94 crore in the corresponding period last year.

 

“Net profit comes from interest income, which is driven by lending. Since our credit and interest income increased, net profit also increased,” said Ajay Kumar Srivastava, managing director and chief executive officer of IOB.

 

 

Interest income up, asset quality improves 

The net interest income (NII), or core income earned by the bank, rose 21 per cent to ₹3,059 crore in Q2FY26 from ₹2,538 crore a year earlier. The gross non-performing assets (GNPA) ratio improved by 89 basis points to 1.83 per cent as of September 2025, compared with 2.72 per cent a year ago.

 

The net NPA ratio declined 19 basis points to 0.28 per cent from 0.47 per cent in the same quarter last year. The provision coverage ratio improved by 42 basis points to 97.48 per cent from 97.06 per cent, while the slippage ratio stood at 0.11 per cent and credit cost at 0.18 per cent during the quarter.

 

Strong business growth and CASA performance 

“We are targeting a business size of around ₹6 trillion this year, so clocking ₹1,000 crore net profit is no longer a challenge. To address CASA concerns, we are onboarding more customers. In the last two fiscals and this half year together, we have onboarded 8.5 million customers,” Srivastava said.

 

CASA deposits increased by ₹5,531 crore to ₹1.37 trillion in Q2FY26 from ₹1.32 trillion a year ago, marking a 4 per cent year-on-year rise. The CASA ratio stood at 40.52 per cent during the quarter.

 

Recoveries and advances continue to strengthen 

Total recovery for the quarter ended September increased to ₹874 crore from ₹851 crore in Q1FY26. Recovery from written-off accounts stood at ₹461 crore.

 

The bank’s total business grew by ₹76,233 crore to ₹6,17,034 crore as of September 2025, up 14 per cent from ₹5,40,801 crore a year earlier.

 

Total deposits increased by ₹28,414 crore to ₹3,39,066 crore from ₹3,10,652 crore in Q2FY25, recording a 9.15 per cent year-on-year rise. Gross advances grew 20.78 per cent to ₹2,77,968 crore as of September 2025, compared with ₹2,30,149 crore in the same period last year.