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Indian Overseas Bank.

BSE: 532388 Sector: Financials
NSE: IOB ISIN Code: INE565A01014
BSE 11:40 | 28 Oct 21.80 -0.70






NSE 11:34 | 28 Oct 21.95 -0.55






OPEN 22.70
VOLUME 1006485
52-Week high 29.00
52-Week low 9.05
P/E 39.64
Mkt Cap.(Rs cr) 41,207
Buy Price 21.80
Buy Qty 1980.00
Sell Price 21.85
Sell Qty 8320.00
OPEN 22.70
CLOSE 22.50
VOLUME 1006485
52-Week high 29.00
52-Week low 9.05
P/E 39.64
Mkt Cap.(Rs cr) 41,207
Buy Price 21.80
Buy Qty 1980.00
Sell Price 21.85
Sell Qty 8320.00

Indian Overseas Bank. (IOB) - Chairman Speech

Company chairman speech

Shri.Partha Pratim Sengupta Managing Director & Chief Executive Officer

Dear Shareholders

I have pleasure in presenting your Bank's Annual Report and financial statements forthe year 2020-21. The last two years have been challenging one for India and its people.The COVID-19 pandemic destroyed several lives and dealt a severe blow to the economichealth of the nation.

Banking sector being an essential service was partially exempted from lock-downorders. Our Branches and other critical units were operating with as much as 50% / 33% ofthe workforce even during peak of the Pandemic to ensure uninterrupted banking services togeneral public. Our Bank lost 61 employees and many more were infected during thePandemic. My heartfelt and deepest sympathies go out to the bereaved families of ourdeceased employees and Bank is committed to extend all possible support to them.

Now I would like to share with you the performance highlights of the Bank during theyear as well as the outlook for the Bank going forward.

Economic Environment

Global Economy

The global economy is showing sign of improvement as fiscal support stepped up sharplyeconomies adapt to social distancing and vaccination rollout gathers momentum. The globaloutlook remains subject to significant downside risks which include the possibility oflarge COVID-19 waves in the context of new virus variants and financial stress amid highdebt levels of emerging markets and developing economies. To control the pandemic at theglobal level there is need of equitable vaccine distribution especially for low-incomecountries. However shape of recovery across various regions depend on severity ofpandemic impact of new restrictions and government policies.

Domestic Economy

The Indian economy recorded a negative growth rate of 24.4 percent and 7.3 percent inQ1 and Q2 of FY 2020-21 respectively due to lockdown imposed amidst the fear of spread ofNovel Corona virus in the country. Lifting of lockdown brought the GDP back on track withpositive growth rate of 0.4 percent in Q3 FY 2020-21 which again fell into negativeterritory by 3.4 percent in Q4 2020-21 due to re-imposition of lockdown in most of thestates amidst the second wave of spread of virus. Overall India's GDP remained in negativegrowth of 8.0 percent in the FY 202021 compared to 4.0 percent of growth in GDP in FY2019-20.

In terms of Gross Value Added (GVA) agriculture and allied activities registered agrowth of 3.0 percent in FY 2020-21 with record production in food grains. This was theonly sector which remained in expansion zone in 2020-21 resulting in increase in theshare of agriculture in overall GVA. Bank credit growth to agriculture and alliedactivities improved to 12.3 percent compared to 4.2 percent growth in previous year.

Outlook for Banking Sector

During the year GOI & RBI continued to take expedient measures to revive growth& investment in this pandemic situation. The reduction in corporate tax cut from 30%to 22% has given big relief & boost to the industries. The liquidity support andemergency credit support especially to micro small and medium units (MSMEs) was vitalstep by RBI to deal with CoVID-19 pandemic.

The other continued measures like moratorium on loan repayment Targeted Long TermOperations (TLTRO) Emergency Credit Line Guarantee Scheme (ECLGS) etc. have safeguardedlivelihoods and helped in seamless resumption of business activity during this pandemic.

After the first wave of COVID-19 pandemic there was improvement in business but thesecond wave of COVID-19 has once again resulted in slowdown of the business. There is anadditional responsibility on the Banks to ensure a balance between business continuity andcustomer care. The digital transaction has become vital in the present pandemic scenario.For improvement in Digital Platform the Bank has appointed Ernst & Young as digitalconsultant as part of its growth strategy and to transform its banking services into adigitalised form.

Financial Performance - Highlights of your Bank - 2020-21

After continuously posting net losses during last 6 years Bank has now declared yearlynet profit of Rs.831 crore for FY 2020-21.

Bank could reduce the gross NPA substantially from Rs.19913 Crores to Rs. 16323 Croresand thereby brought down the GNPA% from 14.78% to 11.69% through multipronged and focusedrecovery initiatives.

NNPA has been brought down from Rs.6603 Crores to Rs.4578 Crores in absolute terms andfrom 5.44%to 3.58% in percentage terms. The NNPA% of the Bank as on 31.3.2021 is below PCAthreshold.

PCR of the Bank has improved substantially as on 31.3.2021 from 86.94% to 90.34%. oneof the highest in industry.

As a result Bank could register a Net profit to the tune of Rs.350 Crores for Q4 FY-20-21 and Rs.831 crore for whole FY 20-21.

Bank concentrated in expansion of RAM segment advances especially housing loan andjewel loan which is evident in growth of RAM share to domestic advances reaching to 73.81%as of 31st March-2021.

Rebalancing of Corporate portfolio has resulted in reduction of overall advances.Overall interest income has recorded marginal decline due to reduction in Base Rate MCLRand RLLR. Growth under low cost deposits and shedding of high cost deposits has kept thecost of deposit under control.

CASA has improved from Rs.89751 Crores as of 31st March-2020 to Rs.102165 Crores as of31st March-2021 with a growth of 13.83%. CASA% has moved up from 40.26% as of 31st March-2020 to 42.52% as of 31st March-2021.

High Cost Bulk deposit has been brought down from Rs.17092 Crores as of March-2020 toRs.8055 Crores as of March-2021with a reduction of 52.87%.

Net interest income has improved from Rs.5303 Crores in FY19- 20 to Rs.5899 Crores inFY-20-21.

Other Income has increased from Rs.3306 Crores in FY-19-20 to Rs.5559 Crores in FY-20-21 due to improvement in Treasury income and recovery in written off account.

Capital Position

Capital Infusion by Government of India

The Bank received capital infusion amounting to Rs.4100 crore on 31.03.2021. Theamount was kept under share application money account. The said amount was included inBank's Common Equity Capital (CET-I) after RBI approval vide their letter dated30.04.2021.

Further the Bank issued and allotted 2465423932 equity shares to Government ofIndia on 02.06.2021 against Capital Infusion amount of Rs.4100 crore.

Awards and Accolades

I am pleased to inform you that lOB

• Was awarded "Best Banker under MSME category - 1st Prize" for theyears FY 2016-17 FY 2017-18 & FY 2018-19 from Hon'ble Chief Minister of Tamil Nadu.

• Was awarded ISO 27001:2013 Certification for Information Security

• Recognition from PFRDA for qualifying in Shine and Succeed campaign duringJuly-August 2020.

• Qualified for "OLD AGE Financial Freedom Fighters" Campaign withExemplary award and Recognition from PFRDA for 6 Regional Heads and Nodal Officer of ourBank

• Qualified for "Makers of Excellence 4.0" Campaign and Recognition fromPFRDA.

Going forward

With the support of huge base of several loyal customers and a large base of youngstrong and energetic work force Brand lOB is sure to play an important role in theBanking Industry.


I take this opportunity to thank the Government of India Reserve Bank of India theMonetary Authorities of countries where the Bank has overseas operations other Governmentand Regulatory Agencies in India and abroad for their valuable support and guidance.

I thank our customers in India and abroad and our shareholders for their faith in BrandIOB as we strive to improve the Bank's position on an ongoing basis and remain stronglycommitted to creating value for our stakeholders.

I thank my colleagues on the Board for the benefit of their expertise and direction. Ialso thank all IOBians for their dedication and commitment.

With warm regards
Yours sincerely
Partha Pratim Sengupta
Managing Director & Chief Executive Officer