Indian Overseas Bank Q2 Results: Net profit jumps 25% to Rs 625 crore; asset quality improves significantly

State-run Indian Overseas Bank (IOB) reported a strong set of financial results for the July-September period on October 27.

IOB reported a strong set of Q2 results. | Image: Reuters

Indian Overseas Bank (IOB) reported a strong set of quarterly numbers on Friday, October 27. The state-run lender's standalone net profit increased 24.6 per cent on a year-on-year basis to Rs 624.6 crore for the July-September period, according to a regulatory filing.

Its net interest income (NII), or the difference between interest earned and interest paid, came in at Rs 2,345.9 crore for the quarter ended September 30, an increase of 20.1 per cent compared with the corresponding period a year ago.

The bank registered an increase of 12.2 per cent in operating profit to Rs 1,677 crore for the quarter under review.

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Its gross advances grew 21 per cent on a year-on-year basis to Rs 2,08,913 crore, while deposits increased 4.3 per cent to Rs 2,61,728 crore, according to a statement.

IOB's CASA ratio improved by 89 bps on a year-on-year basis to 43.65 per cent for the September quarter. A higher CASA ratio, which determines the proportion of current and savings account deposits in total deposits, implies a lower cost of funds.

The lender reported a significant improvement in its asset quality, as reflected in a sequential reduction of 239 basis points (bps) to 4.74 per cent in its gross non-performing assets (GNPAs) as a percentage of total loans. Its net non-performing assets (NNPAs) also came down, to 0.68 per cent for the September quarter from 1.44 per cent three months ago.

The IOB stock gained by as much as Rs 2.1, or 5.6 per cent, to Rs 40.5 apiece on BSE.

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