Indian Overseas Bank plans to raise INR 20 bln via QIP in Jan-Mar, says MD
This story was originally published at 18:36 IST on 20 January 2025
Register to read our real-time news.Informist, Monday, Jan. 20, 2025
Please click here to read all liners published on this story
--Indian Overseas Bk MD: Aim to cross 1% return on assets in Jan-Mar
--CONTEXT: Comments by Indian Overseas Bk's mgmt in post-earnings media call
--Indian Overseas Bank MD: Will open 20 more branches this fincl year
--Indian Overseas Bk MD: Will open 100 more branches in FY26
--Indian Overseas Bk MD: Confident of meeting target for recoveries in FY25
--Indian Overseas Bk MD: Will be very aggressive in growing CASA deposits
--Indian Overseas Bk MD: Retail slippages INR 1.28 bln, up 13.35% QoQ
--Indian Overseas Bank: Plan to raise INR 20 bln via QIP this fincl year
--Indian Overseas Bk: Govt shareholding in bk to fall 2-2.5% post QIP issue
--Indian Overseas Bank: Green deposits not getting much traction
--Indian Overseas Bk: See 13-14% loan growth, 12-13% deposit growth in FY25
--Indian Overseas Bk: See 8-10 bps impact on LCR from draft RBI guidelines
MUMBAI – State-owned Indian Overseas Bank plans to raise INR 20 billion via qualified institutional placement in Jan-Mar, its Managing Director and Chief Executive Officer Ajay Kumar Srivastava said in a post-earnings conference call. After the institutional placement, the shareholding of the government in the bank will come down by 2-2.5% from 96.4%.
"We are working on it in this quarter. We are planning to raise (capital), and at the appropriate time, we will be taking it into account. It depends on the market situation and the response. But it will happen certainly in this financial year, in Q4 (Jan-Mar)," he said.
Srivastava said the bank continues to maintain the loan growth and deposit growth guidance for the current financial year at 13-14% and 12-13%, respectively. As of Dec. 31, the domestic advances of the bank were up 10.81% on year to INR 2.19 trillion and total deposits were up 9.74% on year to INR 3.05 trillion. On net interest margin, Srivastava said they were happy with the current margin of 3.33% and hope to maintain the level going forward.
On asset quality in the microfinance segment, Srivastava said that he does not see any stress in the existing accounts in the segment. Currently, the bank's microfinance book is less than INR 10 billion, he said.
The Indian Overseas Bank is aiming for a return on assets of over 1.0% in Jan-Mar, he said. In the quarter ended December, the return on assets was 0.93%.
The bank, which has a target to recover INR 55 billion this financial year, has recovered INR 30.21 billion in the nine months ended December. The bank plans to raise the remaining INR 25 billion by the end of the financial year. In Oct-Dec, the bank's recovery from technical write-offs was at INR 6.76 billion.
The bank's slippages in Oct-Dec fell 14.2% on year to INR 2.84 billion. Sequentially, the slippages were up 13.1%. Within overall slippages, retail slippages fell 9.4% on year to INR 1.28 billion but rose 13.4% sequentially. Agricultural slippages were up 15.3% on quarter to INR 360 million and micro, small and medium enterprises' slippages were up 21.4% on quarter to INR 1.19 billion.
The bank's gross non-performing assets declined 28.1% on year to INR 60.71 billion as of Dec. 31. The net NPAs of the Chennai-based bank were down 25.1% on year to INR 9.76 billion.
On the proposed liquidity coverage ratio norms, which are set to kick off from Apr. 1, Srivastava said the bank has assessed the guidelines and if the draft guidelines are implemented as it is, it could impact the bank by 8-10 basis points.
Srivastava said the bank has reduced its reliance on bulk deposits and is focussing on increasing their low-cost current, savings account deposits. Within total deposits, the term deposits were up 9.96% on year to INR 1.73 trillion, while CASA deposits were up 9.45% on year to INR 1.32 trillion as on Dec. 31. The CASA ratio stood at 43.37% as on Dec. 31.
The bank recently came out with a green deposit scheme, the demand for which was underwhelming, the management said. "The green deposit is not getting too much of attraction, but of course, the money we are getting in the green deposit is exclusively being used for lending to two green projects," the bank's management said.
Srivastava said the bank plans to open 3 new regional offices and open 20 more branches in the current financial year ending March. The bank plans to open 100 branches in 2025-26 (Apr-Mar).
On Monday, shares of Indian Overseas Bank closed 3.7% higher at INR 52.52 on the National Stock Exchange. End
Reported by Kshipra Petkar
Edited by Saji George Titus
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
