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Indian Overseas Bank Reports 24.32% increase in Net Profit for Q2FY25

Indian Overseas Bank Reports 24.32% increase in Net Profit for Q2FY25
Indian Overseas Bank Reports 24.32% increase in Net Profit for Q2FY25

Indian Overseas Bank (IOB) has announced robust financial results for the quarter ending September 30, 2024 (Q2FY25), reflecting strong growth across key financial metrics and a continued focus on asset quality improvement.

Key Highlights:

  • Total Business saw a significant year-on-year (Y-o-Y) growth of 12.20%, reaching Rs 5,40,801 Crore, up from Rs 4,82,006 Crore.
  • Total Deposits rose by 13.75% Y-o-Y to Rs3,10,652 Crore.
  • Gross Advances increased by 10.16% to Rs2,30,149 Crore.
  • Operating Profit grew substantially by 26.89% Y-o-Y to Rs2,128 Crore, up from Rs 1,677 Crore.
  • Net Profit also saw a notable increase, rising by 24.32% Y-o-Y to Rs 777 Crore.

Strong Asset Quality and Profitability

IOB has demonstrated exceptional progress in reducing non-performing assets:

  • Gross NPA Ratio decreased by 202 basis points (bps) to 2.72% from 4.74% a year ago.
  • Net NPA Ratio improved by 21 bps to 0.47% from 0.68% Y-o-Y.
  • Provision Coverage Ratio (PCR) improved to 97.06%, reflecting an increase of 30 bps Y-o-Y.
  • The Return on Assets (ROA) for Q2FY25 reached 0.82%, showing an improvement of 7 bps from the previous year, while Return on Equity (ROE) increased to 16.90%, up by 74 bps Y-o-Y.

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Income and Margin Growth

IOB’s income generation remained strong:

  • Total Income increased by 22.34% Y-o-Y to Rs 8,484 Crore.
  • Interest Income grew by 17.69% Y-o-Y to Rs 6,851 Crore.
  • Non-Interest Income saw an impressive Y-o-Y growth of 46.59%, reaching Rs 1,633 Crore.
  • Additionally, the Net Interest Margin (NIM) stood at 3.08% for the quarter.

Capital Adequacy

The bank’s Capital Adequacy Ratio (CRAR), under Basel III, remained robust at 17.45%, with a Tier I component of 14.75%.

Enhanced CASA and CD Ratios

  • CASA deposits improved by 10.61% Y-o-Y, totaling ?1,31,856 Crore, with a CASA ratio of 42.44% as of September 30, 2024.
  • The Credit to Deposit (CD) Ratio stood at 74.09% for the quarter.

PERFORMANCE HIGHLIGHTS (y-o-y)

(Quarter Ended 30.09.2024 Over 30.09.2023)

  • Total Business grew by 12.20% to Rs 5,40,801 Crore from Rs 4,82,006 Crore.
  • Total Deposits raised up by 13.75% to Rs 3,10,652 Crore from Rs 2,73,093 Crore.
  • Gross Advances increased by 10.16% to ?2,30,149 Crore from Rs 2,08,913 Crore.
  • Gross Investments increased to Rs 1,08,517Crore from Rs 97,891 Crore.
  • Operating Profit grew by 26.89 % to Rs 2,128 Crore from Rs 1,677 Crore.
  • Net Profit up by 24.32% to Rs 777 Crore from Rs 625 Crore.
  • Gross NPA Ratio recorded at 2.72% as on 30.09.2024 as against 4.74% as on 30.09.2023, with a reduction of 202 bps.
  • Net NPA Ratio stood at 0.47% as on 30.09.2024 as against 0.68% as on 30.09.2023, with a reduction of 21 bps.
  • CASA improved to Rs 1,31,856 Crore from Rs 1,19,206 Crore, reflecting Y-o-Y growth of 10.61%
  • CASA Ratio stood at 42.44% for the quarter ended 30.09.2024.
  • Credit to Deposit (CD) Ratio stood at 74.09% for the quarter ended 30.09.2024.
  • Net Interest Margin stood at 3.08% for the quarter ended 30.09.2024.
  • Provision Coverage Ratio improved to 97.06%, registering an improvement of 30 bps.
  • CRAR stood at 17.45% of which Tier I is 14.75%.
  • Return on Assets (ROA) improved to 0.82%, registering an improvement of 7bps.
  • Return on Equity (ROE) improved to 16.90% from 16.16% with an improvement of 74bps Y-o-Y.

    PROFITABILITY (y-o-y)

    (Quarter Ended 30.09.2024 Over 30.09.2023)

     

  • Net Profit has increased to Rs 777 Crore for the Q2FY25 from Rs 625 Crore for the Q2FY24, registering a growth of Rs 152 Crore at 24.32% Y-o-Y basis.
  • Operating Profit has increased to Rs 2,128 Crore for Q2FY25 from Rs 1,677 Crore for Q2FY24, registering a growth of Rs 451 Crore at 26.89% Y-o-Y basis.
  • Total Income improved by 22.34% to Rs 8,484 Crore for Q2FY25 from Rs 6,935 Crore for Q2FY24.
  • Interest Income grew by 17.69% on Y-o-Y basis to ?6,851 Crore in Q2FY25 as against Rs 5,821 Crore for Q2FY24.
  • Non-Interest Income grew by 46.59% on Y-o-Y basis to Rs 1,633 Crore in Q2FY25 as against Rs 1,114 Crore for Q2FY24.
  • Return on Assets (ROA) improved to 0.82% for Q2FY25 as against 0.75% for Q2FY24.
  • Return on Equity (ROE) also improved to 16.90% for Q2FY25 as against 16.16% for Q2FY24

ASSET QUALITY

  • (Quarter Ended 30.09.2024 Over 30.06.2024 & 30.09.2023)

  • Gross Non-Performing Assets (GNPA) ratio recorded at 2.72% as of 30.09.2024 as against 2.89% as of 30.06.2024 and 4.74% as of 30.09.2023.

  • Net Non-Performing Assets (NNPA) ratio stood at 0.47% as of 30.09.2024 as against 0.51% as of 30.06.2024, 0.68% as of 30.09.2023.

  • Provision Coverage Ratio (PCR) improved to 97.06% as of 30.09.2024 from 96.76% as of 30.09.2023. (As on 30.06.2024, PCR was 96.96%)

RECOVERY

Total Recovery for the quarter ended 30.09.2024 stood at Rs 1,482 Crore.

Recovery from the written off accounts for the quarter ended 30.09.2024 is Rs 1,118 Crore.

CAPITAL ADEQUACY

  • BASEL III Capital Adequacy Ratio (CRAR) stood at 17.45 % as of 30.09.2024, out of which CET1 is 14.75% and Tier-II is 2.70%.

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Key Summary of 30.09.2024 Results

 

Particulars

Q2FY25

Q1FY25

Q2HY24

Q-o-Q

Y-o-Y

H1FY25

H1FY24

Y-o-Y

Operating Profit

2,128

1,676

1,677

26.97%

26.89%

3,804

3,022

25.88%

Net Profit / Loss

777

633

625

22.75%

24.32%

1,410

1,125

25.33%

Deposits

3,10,652

2,98,681

2,73,093

4.01%

13.75%

3,10,652

2,73,093

13.75%

Gross Advances

2,30,149

2,30,092

2,08,913

0.02%

10.16%

2,30,149

2,08,913

10.16%

Gross Investments

1,08,517

1,03,029

97,891

5.33%

10.85%

1,08,517

97,891

10.85%

Business Mix

5,40,801

5,28,773

4,82,006

2.27%

12.20%

5,40,801

4,82,006

12.20%

CASA

1,31,856

1,25,947

1,19,206

4.69%

10.61%

1,31,856

1,19,206

10.61%

CASA Ratio

42.44%

42.17%

43.65%

27bps

(121bps)

42.44%

43.65%

(121bps)

Gross NPA

6,249

6,649

9,893

Reduced by

6.02%

Reduced by 36.83%

6,249

9,893

Reduced by 36.83%

Net NPA

1,059

1,154

1,364

Reduced by

8.23%

Reduced by 22.36%

1,059

1,364

Reduced by 22.36%

Net Interest Margin

3.08%

3.06%

3.12%

2bps

(4bps)

3.06%

3.18%

(12bps)

Gross NPA Ratio

2.72%

2.89%

4.74%

Reduced by 17bps

Reduced by 202bps

2.72%

4.74%

Reduced by 202bps

Net NPA Ratio

0.47%

0.51%

0.68%

Reduced by 4bps

Reduced by 21bps

0.47%

0.68%

Reduced by 21bps

Cost to Income Ratio

48.97%

51.76%

51.53%

(279bps)

(256bps)

50.24%

54.11%

(387bps)

PCR

97.06%

96.96%

96.76%

10bps

30bps

97.06%

96.76%

30bps

CRAR

17.45%

17.82%

17.00%

(37bps)

45bps

17.45%

17.00%

45bps

RoE

16.90%

14.10%

16.16%

280bps

74bps

15.23%

14.79%

44bps

CD Ratio

74.09%

77.04%

76.50%

(295bps)

(241bps)

74.09%

76.50%

(241bps)

RoA

0.82%

0.70%

0.75%

12bps

7bps

0.76%

0.69%

7bps

About Indian Overseas Bank

Founded on February 10, 1937, by Shri M.Ct.M. Chidambaram Chettyar, Indian Overseas Bank (IOB) has a rich heritage and a strong presence in the banking industry. Nationalized in 1969, IOB today operates 3,277 branches, 3,501 ATMs, and has 8194 business correspondents across India. The bank also has an international footprint in four countries: Singapore, Hong Kong, Thailand, and Sri Lanka, serving over 41 million active customers.

IOB is renowned for its pioneering digital solutions aimed at enhancing customer experience and convenience. The bank's robust technology infrastructure includes:

  • Top-rated Core Banking Solution Suite
  • State-of-the-art Private Cloud for On-demand Resource Provisioning
  • Container Orchestration Platform for Building and Scaling Modern Applications
  • API Hub for Seamless Collaboration and Frictionless Delivery
  • Integrated Payment Hub for Handling Diverse Payment Types and Large Transaction Volumes
  • Innovative services introduced by IOB include:
  • Tab Banking:  Delivering services anytime, anywhere by bank staff.
  • My Account My Name: Allowing customers to name their accounts as they wish.
  • Instant Safe Deposit Locker: Accessible through a web-based portal.
  • Instant Account Number Portability
  • Instant Jansuraksha Policy Enrolment: Available via the bank’s website.

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