 "Indian Overseas Bank, IOB")
Indian Overseas Bank (IOB) has become the second most valuable public sector bank (PSB) in terms of market capitalisation (market cap) as the stock zoomed over 90 per cent in the past four weeks.
Shares of IOB hit an over nine-year high of Rs 83.80, gaining 5 per cent on the BSE in Thursday’s intra-day trade. It rallied 94 per cent from a level of Rs 43.15 on January 8. In past six months, the stock price of the Bank skyrocketed 214 per cent. The stock is trading at its highest level since July 2014.
However, at 09:46 am; IOB was trading 5 per cent lower at Rs 75.81, as compared to 0.12 per cent rise in the S&P BSE Sensex.
With Rs 1.43 trillion market cap, IOB currently stands ahead of Punjab National Bank (Rs 1.38 trillion) and Bank of Baroda (Rs 1.29 trillion). In intra-day trades, IOB’s market cap hit 1.58 trillion, the BSE data shows. State Bank of India (SBI) is at number one position with Rs 6.14 trillion market cap.
In overall market cap ranking, IOB entered into the top 50 list and now stands at number 48th position, data shows.
IOB is a PSB with the Government of India (GoI) holding an equity stake of 96.38 per cent as on December 31, 2023. Of the remaining 3.62 per cent public holding, individual shareholders held 1.85 per cent stake and Life Insurance Corporation of India (LIC) held 1.21 per cent holding, the shareholding pattern data shows.
For October to December quarter (Q3FY24), IOB reported a net profit of Rs 723 crore, up 30 per cent compared to Rs 555 crore in the same period in FY23. The state-run lender attributed growth to rise in income and improved asset quality.
Gross non-performing assets (GNPA) improved to Rs 8,441 crore with a ratio of 3.9 per cent, as against Rs 14,333 crore with a ratio of 8.19 per cent in December 2022. Net NPA in Q3FY24 was seen at a ratio of 0.62 per cent, compared to 2.43 per cent in Q3FY23. The bank expects a 13-14 per cent credit growth in the next financial year.
In November 2023, the rating agency ICRA revised the outlook of IOB’s Basel III Tier II Bonds to positive from stable. The revision in the outlook on the long-term rating of IOB’s factors in the sustained improvement in its solvency profile, capital position and profitability levels. This was driven by the reduction in legacy stressed assets, leading to lower credit costs and a consequent improvement in the core and net operating profitability, ICRA had said in rationale.
The Positive outlook on the rating factors in ICRA’s expectation that IOB will continue to maintain the improvement in its earnings profile and asset quality levels, while ensuring that the solvency levels remain better than the negative triggers.
The GoI had infused equity capital of Rs 24,074 crore into the bank during FY2018-FY2022 through recapitalisation bonds. ICRA expects the bank to remain sufficiently capitalised with no need for regulatory or growth capital in the near term. However, the impact of transitioning to provisioning, based on the expected credit loss (ECL) framework, on its capital and profitability levels will remain a monitorable.
The revision in the outlook to ‘Positive’ reflects CARE Ratings’ expectation that IOB will continue to sustain the improvement in asset quality and profitability. Profitability levels of the bank witnessed improvement over the last 3 years and the momentum is expected to continue in the medium term. The revision also factors in comfortable capitalisation levels which will aid in growth going forward, CARE Ratings had said in rationale.
Shares of IOB hit an over nine-year high of Rs 83.80, gaining 5 per cent on the BSE in Thursday’s intra-day trade. It rallied 94 per cent from a level of Rs 43.15 on January 8. In past six months, the stock price of the Bank skyrocketed 214 per cent. The stock is trading at its highest level since July 2014.
However, at 09:46 am; IOB was trading 5 per cent lower at Rs 75.81, as compared to 0.12 per cent rise in the S&P BSE Sensex.
With Rs 1.43 trillion market cap, IOB currently stands ahead of Punjab National Bank (Rs 1.38 trillion) and Bank of Baroda (Rs 1.29 trillion). In intra-day trades, IOB’s market cap hit 1.58 trillion, the BSE data shows. State Bank of India (SBI) is at number one position with Rs 6.14 trillion market cap.
In overall market cap ranking, IOB entered into the top 50 list and now stands at number 48th position, data shows.
IOB is a PSB with the Government of India (GoI) holding an equity stake of 96.38 per cent as on December 31, 2023. Of the remaining 3.62 per cent public holding, individual shareholders held 1.85 per cent stake and Life Insurance Corporation of India (LIC) held 1.21 per cent holding, the shareholding pattern data shows.
For October to December quarter (Q3FY24), IOB reported a net profit of Rs 723 crore, up 30 per cent compared to Rs 555 crore in the same period in FY23. The state-run lender attributed growth to rise in income and improved asset quality.
Gross non-performing assets (GNPA) improved to Rs 8,441 crore with a ratio of 3.9 per cent, as against Rs 14,333 crore with a ratio of 8.19 per cent in December 2022. Net NPA in Q3FY24 was seen at a ratio of 0.62 per cent, compared to 2.43 per cent in Q3FY23. The bank expects a 13-14 per cent credit growth in the next financial year.
In November 2023, the rating agency ICRA revised the outlook of IOB’s Basel III Tier II Bonds to positive from stable. The revision in the outlook on the long-term rating of IOB’s factors in the sustained improvement in its solvency profile, capital position and profitability levels. This was driven by the reduction in legacy stressed assets, leading to lower credit costs and a consequent improvement in the core and net operating profitability, ICRA had said in rationale.
The Positive outlook on the rating factors in ICRA’s expectation that IOB will continue to maintain the improvement in its earnings profile and asset quality levels, while ensuring that the solvency levels remain better than the negative triggers.
The GoI had infused equity capital of Rs 24,074 crore into the bank during FY2018-FY2022 through recapitalisation bonds. ICRA expects the bank to remain sufficiently capitalised with no need for regulatory or growth capital in the near term. However, the impact of transitioning to provisioning, based on the expected credit loss (ECL) framework, on its capital and profitability levels will remain a monitorable.
The revision in the outlook to ‘Positive’ reflects CARE Ratings’ expectation that IOB will continue to sustain the improvement in asset quality and profitability. Profitability levels of the bank witnessed improvement over the last 3 years and the momentum is expected to continue in the medium term. The revision also factors in comfortable capitalisation levels which will aid in growth going forward, CARE Ratings had said in rationale.
