Chennai-based public sector lender Indian Overseas Bank (IOB) on Tuesday reported a net profit of Rs 212.87 crore for the third quarter of FY21 as compared to a net loss of Rs 6,075 crore in the corresponding quarter of the earlier monetary year.
The bank has recorded an boost of 11.3% in its total earnings to Rs 5,786.54 crore as against Rs 5,197.94 crore. IOB, which was below Prompt Corrective Action (PCA), stated it has been posting income for 4 consecutive quarters and just about fulfilled all the needs to come out of the PCA.
Speaking to media persons just after releasing the earning functionality, via virtual mode, Partha Pratim Sengupta, MD & CEO, IOB, stated the bank plans to come out of PCA by focusing on recovery, low-price deposits and significantly less capital consuming advances.
“For the last four quarters, we have been making profit consistently. When compared with Q3 performance of FY20, there was a marked improvement in all key parameters. It is a matter of time for us to exit PCA and is up to the regulator to decide,” he stated.
IOB had received a capital infusion of more than Rs 8,000 crore in two tranches for the duration of the final two quarters of the final monetary year, which helped the loss-producing bank restart the organization with a clean slate. Coupled with recovery and asset-light advances, the bank could accomplish income for the duration of the final 4 quarters.
The MD stated there has been perceptible modify in NPA levels accomplished via recovery measures.
“Currently, the bank has a carry forward loss of Rs 17,500 crore. Our aim is to recover at least Rs 1,000 crore per quarter. In the first quarter of FY21, we recovered about Rs 200 crore due to lockdown, followed by Rs.760 crore and Rs 1,055 crore, respectively. Going forward, the focus will be on recovery in excess of Rs 1,000 crore and it will add to our bottom line,” he stated.
According to him, IOB has evolved a policy of not taking fresh exposures in stressed sectors although the bank had exited from accounts in the stressed sectors, wherever feasible.
During the quarter, gross non-performing assets (GNPAs) lowered to Rs 16,753 crore from Rs 23734 crore and stood at 12.19% as against 17.12% and net NPA was contained at Rs 3,905 crore, as compared to 7,087 crore, which was 3.13% as against 5.81%. The provision coverage ratio enhanced to 91.91% from 86.20%.
While interest earnings contracted to Rs 4,244 crore from Rs 4,352 crore, other earnings rose 82.36 % to Rs 1,542.82 crore. Net interest margin stood at 2.45%.
He stated about Rs 18,000 crore worth NPAs are awaiting NCLT’s resolution, although Rs 3,000 crore assets was anticipated to be restructured.
IOB had board’s approval to raise up to Rs 5,500 crore capital. He stated the bank required only Rs3,000 crore and the timing of the challenge will be decided at a later date.