Earnings Review
Indian Overseas Bk PAT up 30% on fall in operating expenses
This story was originally published at 17:29 IST on 2 May 2025
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--Indian Overseas Bk Jan-Mar net profit INR 10.51 bln vs INR 8.08 bln yr ago
--Indian Overseas Bk Jan-Mar total income INR 92.15 bln vs INR 91.06 bln
--Indian Overseas Bk Jan-Mar provisions INR 10.63 bln vs INR 7.68 bln yr ago
--Indian Overseas Bk gross NPA ratio 2.14% as on Mar 31 vs 2.55% quarter ago
--Indian Overseas Bk net NPA ratio 0.37% as on Mar 31 vs 0.42% quarter ago
--Indian Overseas Bk Jan-Mar NPA provisions INR 2.00 bln vs INR 4.09 bln
--Indian Overseas Bk Basel-III capital adequacy ratio 19.74% as on Mar 31
--Indian Overseas Bk provision coverage ratio 97.30% as on Mar 31
--Indian Overseas Bk board OKs raising upto INR 40 bln via equity
--Indian Overseas Bk board OKs raising upto INR 10 bln via bonds
--Indian Overseas Bk FY25 net profit INR 33.35 bln vs INR 26.56 bln year ago
--Indian Overseas Bk: Held COVID-19 provision of INR 16.47 bln as on Mar 31
--Indian Overseas Bk FY25 total income INR 336.76 bln vs INR 297.06 bln
--Indian Overseas Bk FY25 provisions INR 41.76 bln vs INR 33.51 bln year ago
--Indian Overseas Bk FY25 NPA provisions INR 8.34 bln vs INR 27.06 bln yr ago
By Vaishali Tyagi
MUMBAI – Indian Overseas Bank Friday reported an increase in net profit for the March quarter, owing to a significant fall in operating expenditure, particularly as its employee costs halved from the year-ago period. For the March quarter, the bank's bottom line rose 30.1% on year to INR 10.51 billion. Sequentially, it was up over 20%.
The bank's operating expenditure fell to INR 20.86 billion from INR 32.79 billion a year ago. Sequentially, however, the operating expenditure rose 14.6%. The bank reduced its employees cost by 55% on year to 11.32 billion. In the previous quarter, the lender's employees cost stood at INR 11.69 billion
A rise in interest income also supported the bank's profit. In Jan-Mar, the Chennai-based bank's interest income rose 15.2% on year to INR 76.34 billion. Quarter-on-quarter, the interest income rose 7.3%. The bank's income on investments jumped around 18% on year to INR 18.16 billion, which helped interest income grow and contribute to the rise in profit. The bank's total income rose marginally by 1.2% on year to INR 92.15 billion in Jan-Mar. Sequentially, the total income was up 9.6%.
However, a significant fall in other income of the bank weighed on the bank's bottom line. For the quarter ended March, the bank's other income fell 36.2% on year to INR 15.81 billion. However, other income was up 21.9% sequentially. Shares of Indian Overseas Bank closed at INR 37.86 on the National Stock Exchange, up 0.9% from the previous session.
The bank's net non-performing asset ratio improved to 0.37% from 0.42% a quarter ago, while its gross non-performing asset ratio fell to 2.14% from 2.55% a quarter ago.
The bank's provision coverage ratio improved slightly to 97.30% as on Mar 31. Provisions and contingencies other than tax for the Jan-Mar quarter were INR 10.63 billion, up from INR 7.67 billion a year ago, while provisions for non-performing assets fell around 52% to INR 1.99 billion. Indian Overseas Bank's Basel-III capital adequacy ratio was 19.74% as of Mar. 31.
The bank's domestic net interest margin for the March quarter was 3.77%, up 30 basis points from a quarter ago, while the bank's global net interest margin improved to 3.58% as on Mar. 31 from 3.33% a quarter ago. The bank's net interest income for the quarter ended March stood at INR 31.23 billion, up 13% on year. Sequentially, its net interest income rose 11.98%.
For Apr-Mar (2024-25), the net profit stood at INR 33.35 billion, up from INR 26.56 billion for FY24. The lender's total income for FY25 stood at INR 336.76 billion, up 13.3%.
Provisions and contingencies other than tax for the FY25 were INR 41.76 billion, up from INR 33.51 billion a year ago, while provisions for non-performing assets fell around 69% to INR 8.34 billion. The bank held COVID-19 related provision as contingency provision amounting to INR 16.47 bln as on Mar 31. The board of the bank has approved raising up to INR 40 billion through equity and INR 10 billion through debentures.
The bank's total deposits grew 9.1% on year to INR 3.12 trillion as of Mar. 31. Quarter on quarter, the deposits rose merely 2.2%, according to an investor presentation by the bank. Gross advances of the bank stood at INR 2.50 trillion as on Mar. 31, up 14.1% from the previous year.
The lender's current account savings account deposits grew 8.5% on year to INR 1.36 trillion as on Mar. 31, with the current account savings account ratio at 43.65%. The bank's credit to deposit ratio was 80.15% at the end of the March quarter.
According to the investor presentation, the bank had 3,335 branches as on Mar. 31. Out of the total branches, those in rural and semi-urban areas numbered 1,940. During the year, the Chennai-based bank opened 101 new branches across the country. End
Edited by Avishek Dutta and Ashish Shirke
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