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Indian Overseas Bank has reported 26% growth in net profit at Rs 632.81 crore
for the quarter ended June 2024 (Q1FY2025). The bank has posted 5% growth in
net interest income (NII), while the core fee income of the bank improved 15%
in Q1FY2025. The Net Interest Margin (NIM) of the bank eased to 3.06% in
Q1FY2025 compared to 3.21% in the corresponding quarter of previous year.
On business front, the
bank as has posted 16% growth in business with strong 20% surge in loan book.
The asset quality of the bank has further improved in Q1FY2025. Bank has
substantially raised the credit to deposit ratio to 77.0% at end June 2024 from
72.3% at end June 2023. However, the CASA ratio of the bank has declined to
42.2% at end June 2024 from 44.1% at end June 2023.
Asset quality improves: The bank has continued
to further improve asset quality in Q1FY2025.
The fresh slippages of
loans declined to Rs 264 crore in Q1FY2025 compared with 350 crore in previous
quarter and Rs 547 crore in the corresponding quarter last year.
The recoveries of NPAs
stood at Rs 139 crore, upgradations at Rs 52 crore and the write-off of loans
was at Rs 251 crore in Q1FY2025.
Provision coverage ratio
rose slightly to 96.96% at end June 2024 compared to 96.85% a quarter ago and
94.03% a year ago.
The capital adequacy
ratio of the bank stood at 17.8% with Tier I ratio at 15.0% at end June 2024.
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Asset Quality
Indicators: Indian Overseas Bank
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Jun-24
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Mar-24
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Dec-23
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Sep-23
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Jun-23
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Variation
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QoQ
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YoY
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Gross NPA (Rs Crore)
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6648.71
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6794.43
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8440.83
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9893.30
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13628.98
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-2
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-51
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Net NPA (Rs Crore)
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1153.51
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1216.86
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1302.58
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1364.34
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2589.97
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-5
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-55
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% Gross NPA
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2.89
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3.10
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3.90
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4.74
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7.13
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-21
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-424
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% Net NPA
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0.51
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0.57
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0.62
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0.68
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1.44
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-6
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-93
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% PCR
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96.96
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96.85
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96.85
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96.76
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94.03
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11
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293
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% CRAR - Basel III
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17.82
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17.28
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16.80
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17.00
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16.56
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54
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126
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% CRAR - Tier I -
Basel III
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14.99
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14.47
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13.95
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13.81
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13.34
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52
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165
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Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Healthy business growth:
The business of the bank
has increased 16% YoY to Rs 528773 crore end June 2024, driven by 20% surge in
advances to Rs 230092 crore. Deposits rose 13% to Rs 298681 crore at end June
2024.
CASA deposits ratio declines:
The CASA deposits of the
bank increased 8% YoY to Rs 125947 crore at end June 2024. The CASA ratio
declined to 42.2% at end June 2024 compared to 44.1% at end June 2023, while eased
from 43.9% a quarter ago. The term deposits have increased 17% to Rs 172734
crore end June 2024.
Strong loan growth: Advances growth was
driven by retail loans rising 17% YoY to Rs 51029 crore at end June 2024, while
credit to agriculture increased 36% to Rs 60786 crore and MSME 19% to Rs 42642
crore at end June 2024. The corporate credit has also moved up 16% to Rs 58002
crore end June 2024. The overseas credit rose 6% to Rs 17633 crore end June
2024.
Investment book of the bank moved up 7% YoY to Rs 101944 crore at end June 2024.
The AFS book dipped 21% to Rs 8767 crore, while HTM book rose 9% to Rs 87296
crore at end June 2024.
Margins improve: The bank has showed 57
bps YoY jump in cost of deposits to 4.95%, while yield on advances rose 23 bps
YoY to 8.75% in Q1FY2025. Thus, the NIM has declined 15 bps YoY to 3.06%.
Branch expansion: The bank has added 14
branches and cut 1 ATMs in Q1FY2025, taking overall tally to 3250 branches and
3505 ATM`s end June 2024.
Book value of the bank stood at Rs
13.1 per share at end June 2024, while the adjusted book value (net of NNPA and
25% of restructured advances) was Rs 12.3 per share at end June 2024.
Quarterly Performance
NII rises at moderate
pace as NIM decline: Bank has recorded 20% increase in the interest earned at Rs
6535.03 crore, while interest expenses jumped 32% to Rs 4093.96 crore in
Q1FY2025. NII improved 5% to Rs 2441.07 crore in the quarter ended June 2024.
Healthy growth in the
core fee income: Bank has posted strong 15% growth in core fee income to Rs 316
crore, while the treasury income surged 865% to Rs 222 crore, supporting 29% surge
in the overall non-interest income to Rs 1032.97 crore in the quarter ended
June 2024. However, the recoveries and other income declined 24% to Rs 308
crore and forex income fell 64% to Rs 27 crore.
Expense ratio improves: The operating expenses of
the bank rose 1% to Rs 1798.18 crore, as other expenses moved up 19% to Rs
673.74 crore, while employee expenses declined 7% to Rs 1124.44 crore in
Q1FY2025. Cost to income ratio improved to 51.8% in Q1FY2025 compared with
57.0% in Q1FY2024, helping the Operating Profit to increase 25% to Rs 1675.86
crore.
Provisions and
contingencies rose: The bank has showed 12% decline in provisions to Rs 937.87 crore.
The loan loss provisions dipped 80% to Rs 164 crore, while other provisions jumped
2050% to Rs 774 crore.
Effective tax rate rose to 14.3% in Q1FY2025 from 1.4% in Q1FY2024. Net Profit rose by 26%
YoY to Rs 632.81 crore during quarter ended June 2024.
Financial Performance
FY2024:
Bank has posted 27%
increase in net profit to Rs 2655.61 crore in the year ended March 2024
(FY2024). The net interest income increased 19% to Rs 9829.41 crore, while
non-interest income moved up 38% to Rs 5656.26 crore, pushing up net total
income by 25% to Rs 15485.67 crore in FY2024. The operating expenses increased
36% to Rs 8721.91 crore, while provision and contingencies declined 7% to Rs
3351.23 crore, allowing profit before tax to increase 45% to Rs 3412.53 crore
in FY2024. The cost-to-income ratio increased to 56.3% in FY2024 compared to
51.9% in FY2023. An effective tax rate moved up to 22.2% in FY2024 compared to
10.6% in FY2023. The net profit has increased 27% to Rs 2655.61 crore in
FY2024.
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Indian Overseas Bank: Results
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Particulars
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2406 (3)
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2306 (3)
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Var %
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2403 (12)
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2303 (12)
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Var %
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Interest Earned
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6535.03
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5424.31
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20
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24049.73
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19400.33
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24
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Interest Expended
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4093.96
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3101.50
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32
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14220.32
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11145.44
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28
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Net Interest Income
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2441.07
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2322.81
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5
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9829.41
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8254.89
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19
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Other Income
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1032.97
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803.03
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29
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5656.26
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4108.75
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38
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Net Total Income
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3474.04
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3125.84
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11
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15485.67
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12363.64
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25
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Operating Expenses
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1798.18
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1780.52
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1
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8721.91
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6421.46
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36
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Operating Profits
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1675.86
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1345.32
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25
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6763.76
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5942.18
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14
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Provisions &
Contingencies
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937.87
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837.96
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12
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3351.23
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3593.93
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-7
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Profit Before Tax
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737.99
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507.36
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45
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3412.53
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2348.25
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45
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Provision for tax
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105.18
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7.01
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1400
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756.92
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249.46
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203
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PAT
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632.81
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500.35
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26
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2655.61
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2098.79
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27
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EPS*(Rs)
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1.3
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1.1
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1.4
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1.1
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Adj BV (Rs)
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12.3
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10.4
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12.4
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8.5
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* Annualized on current equity of
Rs 18902.41 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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