Indian Overseas Bank Q2 results: IOB's Gross NPAs reduce by 2.53 pct, 15.43% YoY credit growth in housing loan

The Indian Overseas Bank has reported a 2.53% reduction in its Gross NPAs and 15.43 per cent YoY credit growth in housing loans in the September quarter of 2019.

CASA of IOB improved to 38.06 per cent as on 30th September 2019 as against 35.95 per cent as on 30th September 2018 with YoY growth at 211 bps. Photo: Reuters

Indian Overseas Bank Q2FY20 results: On account of improved CASA to 38.06 per cent as on 30th September 2019 as against 35.95 per cent as on 30th September 2018 with YoY growth at 2.11 per cent and 10.68 per cent YoY growth in retail segment, the Indian Overseas Bank (IOB) has reported 2.53 per cent reduction in its Gross NPA (Non Performing Asset) and 15.43 per cent YoY credit growth in housing loan in September quarter of 2019. The Public Sector bank reported its Q2FY2019 results in a written statement that Gross NPA as at 30th September 2019 reduced by 253 bps or 2.53 per cent and stood at Rs 28,674 crore with the ratio of 20 per cent as against Rs 33,262 crore with the ratio of 22.53 per cent as at 30th June 2019. GNPA has reduced both in quantum and as a percentage of Gross Advances QoQ.

"CASA of the Bank improved to 38.06 per cent as on 30th September 2019 as against 35.95 per cent as on 30th September 2018 with YoY growth at 211 bps. Total CASA has increased from Rs 80,219 crores as on 30.09.2018 to Rs 84,595 crores as on 30.09.2019, SB (Savings Bank) registered 4.73 per cent YoY growth as at 30th September ‘19 over 30th September 2018," the Indian Overseas Bank informed in its press statement.

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Elaborating upon its performance in the housing loan segment the IOB informed, "The Bank registered 15.43 per cent credit growth in housing loan segment Y-o-Y. During the half-year ended September 2019 the segment has grown by 7.38 per cent over March 2019." On steps taken by the Indian Overseas Bank listed out the following steps that helped them log 15.43 per cent YoY credit growth in housing loan:

1] Setting up of retail marts for focused lending;
2] Empanelment of Direct Selling agents;
3] Implementation of pre-approved home loan;
4] Concession of 0.15% has been given to women borrowers; and
5] Staff referral scheme has been introduced.

The Indian Overseas Bank's Operating Profit for the quarter ended 30th September 2019 was Rs 746 crore as against Rs 1,304 crore for the quarter ended 30th September 2018. It was Rs 1,304. 22 crore in September 2018 aided by one-off income from the sale to ARC to the extent of Rs 660.79 crore. Provisions & Contingencies increased by Rs 979.43 crore on YoY basis. Provision Coverage Ratio improved to 75.85 per cent as against 72.24 per cent as of 30th June 2019. Bank has made required provisioning in advances in specific Accounts so as to improve Net NPA consciously to bring it below 6%. Thus the Bank is focusing its efforts to come out of PCA by March 2020.

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