Public sector lender Indian Overseas Bank on Wednesday reported a 58% rise in net profit to Rs 552 crore in the quarter ended March 2022, helped by lower loan loss provisions and better collections.
The bank had reported its after-tax profit of Rs 350 crore in the corresponding quarter of FY21.
For the full fiscal year 2021-22, the bank’s net profit doubled to Rs 1,709 crore from Rs 831 crore in the previous fiscal year.
“We had to make less provisions for our bad and doubtful assets. We kept our provisions very strong, so any recoveries we had made were added to our earnings,” he told reporters. the managing director and CEO of the bank, Partha Pratim Sengupta.
He said the bank had targeted cash recoveries of Rs 4,000 crore on NPA (non-performing assets) and technically written-off accounts in FY22, and achieved cash recoveries of Rs 4,200. crores of rupees.
Interest income amounted to Rs 4,215 crore for the quarter ended March 31, 2022 against Rs 4,057 crore last year.
Net interest margins improved to 2.41% from 2.22% in the prior year quarter.
The gross NPA stood at Rs 15,299 crore with a ratio of 9.82% against Rs I6,323 crore with a ratio of 11.69% as at March 31, 2021.
Net NPAs were 2.65% versus 3.58% in the prior year quarter.
Slippages during the quarter were Rs 981 crore, compared to Rs 2,841 crore a year ago.
The bank’s provision coverage ratio improved to 91.66% as of March 31, 2022, from 90.34% the previous year.
Gross advances amounted to Rs 1,55,801 crore in the quarter under review against Rs 1,39,597 crore a year ago.
The bank has adopted a policy of not taking new exposures in stressed sectors, accounts rated below the hurdle mark with BB and lower ratings.
He also exited struggling sector accounts where possible.
Sengupta said the bank was carrying out thorough risk analysis and risk mitigation in the business loan account where it was exposed.
The lender expects loan growth of 12 percent in the current fiscal year.
Its equity ratio was 13.83%. The lender will seek to raise Rs 1,000 crore in equity in the current financial year, Sengupta said.
The bank’s certificates ended at Rs 17.50 each, up 2.94% on BSE.