Indian Overseas Bank(IOB) Q4 result, loss at Rs646.66 crore

Indian Overseas Bank (IOB) Wednesday reported a net loss of Rs646.66 crore in the March quarter, its seventh consecutive loss-making quarter. The figure, though is less than Rs963.19 crore loss in the same quarter a year ago.

Net interest income increased marginally to Rs1,323.96 crore from Rs1307.86 crore a year ago. Other income rose 89.80% to Rs1302.10 crore at the end of the quarter, compared with Rs686.03 crore a year ago. Provisions against bad loans stood at Rs1,789.74 crore, against Rs2,666.16 crore a year ago and Rs1,406.03 crore in the preceding quarter.

Net interest income is the difference between interest earned on loans and that paid on deposits.

Gross non-performing assets (NPAs) as a ratio of gross advances were at 22.39%, against 22.42% as of 31 December and 17.40% a year ago. Net NPA ratio at the end of the fourth quarter was 13.99%, slightly down from 14.32% in the third quarter.

Uco Bank, where RBI initiated prompt corrective action (PCA) last week, stands next to Indian Overseas Bank in terms of high gross NPA.The Reserve Bank of India (RBI) could potentially trigger prompt corrective action (PCA) on IOB under the new framework, where the first threshold for net bad loans has been set at 6%.

Return on assets for IOB are negative for last two consecutive years—at -1.21% and -0.97% for FY17 and FY16, respectively—which calls for further scrutiny as per the PCA plan.

Capital adequacy ratio on 31 March stood at 10.50% against 9.66% a year ago. As per central bank norms, capital adequacy for the bank should be equal to or above 10.25% at the end of March 2017. Provision coverage ratio for the year ended quarter stood at 53.63%, slightly higher than 52.17% in the previous quarter.