CHENNAI, 09 FEBRUARY, 2023 (GPN): Chennai-based Indian Overseas Bank (IOB) registered a 22 per cent growth in its profit at Rs 555 crore in Q3FY23 for the quarter ended December 2022 due to an increase in interest income and improved asset quality.

The State owned Lender had posted a net profit of Rs 454 crore in the same quarter a year ago.The bank’s total income increased to Rs 6,006 crore in the latest December quarter from Rs 5,317 crore in the year-ago period, IOB said in it’s regulatory filing.

Interest income of the bank increased to Rs 5,056 crore as against Rs 4,198 crore in the third quarter of the previous fiscal.

The non-interest income contracted to Rs 950 crore from Rs 1,119 crore due to muted income from treasury operations. Net interest margin improved to 3.27% from 2.4%.

On the asset quality front, the bank recorded an improvement with gross NPAs (Non-Performing Assets) declining to 8.19 per cent, as compared to 10.4 per cent at the end of third quarter of previous fiscal.

At the same time, net NPAs too eased to 2.43 per cent, as against 2.63 per cent in the same period a year ago.

As a result, provisions for bad loans declined to Rs 711 crore as against Rs 937 crore during the same quarter a year ago.Provision Coverage Ratio stood healthy at 91.34%

The capital adequacy ratio declined marginally to 15.16 per cent in the December quarter as against 15.41 per cent at the end of third quarter of previous financial year.

MD and CEO Ajay Kumar Srivastava, Said, “For FY23, we had set a target to recover Rs 4,500 crore. In the nine-month period, we have recovered Rs 3,200 crore.While the bank had set for itself a similar recovery target for the next fiscal, it is also eyeing to recover an additional Rs 1,000-1,500 crore from technically written-off accounts and the total recovery during the period was Rs 460 crore against Rs 412 crore.”

The bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts, BB and below rated accounts. The lender has also exiled from accounts in the stressed sectors, wherever feasible, the MD said.

To a question by GPN, Mr. Srivastava said,“IOB has an exposure of Rs 787 crore to Adani Group firms. It is a standard account. There are no defaults with regular repayments. It amounts to 0.4% of our total advances.”

Mr. Srivastava added, IOB is planning to raise funds during the next fiscal for which the figures will be revealed later.Ends