Indian Overseas Bank(IOB) Q3 results: Net profit rises 30%

 


Public sector lender Indian Overseas Bank on January 24 reported a net profit of Rs 722 crore for the October-December quarter of 2023-24, which marks a 30 percent jump from Rs 555 crore clocked a year ago.


The bank's gross non-performing asset (NPA) stood at 3.90 percent, down from 8.19 percent recorded in the same quarter last year. On the other hand, net NPA for the quarter stood at 0.62 percent, improving from 2.43 percent a year back.


The net interest income of the bank stood at Rs 6,176 crore for the quarter,

compared to Rs 5,056 crore in the corresponding quarter last year. The net interest margin of the bank contracted to 3.12 percent compared to 3.27 percent last year.


Total deposits of the lender stood at Rs 2.78 lakh crore compared to Rs 2.73 lakh crores last year. The current account and savings account (CASA) ratio of the bank stood at 43.49 percent against 43.65 percent last year. The bank's advances stood at Rs. 2.16 lakh crore compared to Rs 2.08 lakh crores last year.


The lender's credit deposit (CD) ratio stood at 77.74 percent compared to 67.99 percent.

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Indian Overseas Bank(IOB) Q1 net profit up by 28%

 


Public sector lender Indian Overseas Bank on August 2 reported a 27.50 percent rise in net profit at Rs 500 crore in the first quarter of the financial year 2023-24, up from Rs 392 crore in the year-ago period.


Net interest income jump 22 percent and stood at Rs 5,424 crore for the quarter ended June 2023 compared to Rs 4,435 crore last year.


The lender's total deposits increased to Rs. 2.64 lakh crores up from Rs. 2.60 lakh crores last year. The current account and savings account (CASA) of the bank improved to 44.14 percent compared to 43.07 percent last year. Total CASA from Rs 1.12 lakh crore to Rs 1.16 lakh crore.


The bank's gross non-performing assets (GNPA) declined to 7.13 percent from 9.16 percent in the same quarter of the previous fiscal.


Net non-performing assets (NNPAs) of fell to 1.44 percent from 2.43 percent last year.


The provision coverage ratio improved to 94.03 percent against 91 .86 percent.


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Indian Overseas Bank(IOB) Q4 profit rises 18%


Indian Overseas Bank has reported 17.12% rise in net profit to Rs 650 cr for the quarter ended march 2023 as against Rs 555 crore for December 2022 quarter.


The year on year net profit of the bank has surged by 22.75% to Rs 2,099 cr from Rs 1,710 crore as reported in the financial year 2021-22 on the back of strong growth in net interest income and improvement in asset quality.


On the asset quality side, the bank has seen decrease in both gross NPA and net NPA. The bank’s gross NPA has gone down to Rs 14,072 cr (7.44%) as on 31.03.2023 from Rs 14,333 crore (8.19%) as reported on 31.03.2022.


Similarly, the net NPA of the bank has decreased to Rs 3,266 cr (1.83%) from Rs 4,000 cr (2.43%) for the above said period.


The provision requirement for NPA has decreased by 26.52% to Rs 2,499 cr as on 31.03.2023 as against Rs 3401 cr reported in the previous year due to improvement in the asset quality.


The credit cost of the bank has reduced to 1.70% as of 31.03.2023 as against 2.35% reported in the last year.


The net interest margin of the bank stood at 3.20% as on the quarter ended March 2023. The return on asset of the bank also increased to 0.83% as on the quarter ended March 2023 as against 0.73% in the previous quarter.


The capital adequacy ratio has improved to 16.10% as of 31.03.2023 as against 15.16% as of 31.12.2022 and as against 13.83% as of 31.03.2022.


The net interest income of the bank has increased by 30.82% to Rs 8,256 crore as of 31.03.2023 from Rs 6,311 crore reported in the previous financial year on the back of strong credit growth. The credit growth of the bank has increased by 21.31% (YoY) to Rs 1,89,009 crore as on March 31, 2023.

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IOB declares a 20% jump in net profit in Q1


 Indian Overseas Bank (IOB), a public sector lender, announced on Saturday that its net profit for the first quarter of the current fiscal year increased by 20% to Rs.392 crore from Rs.327 crore in the same quarter of the previous year.


According to IOB, its total deposits rose by 7.04 per cent year over year to Rs. 2,60,045 crores as of June 30, 2022, from Rs. 2,42,941 crores in Q1FY22. When compared to the previous year, the bank's overall business expanded by 10.92 per cent YoY to Rs. 4,23,589 crores as of June 30th, 2022, from Rs. 3,81,885 crores in Q1FY22. Gross Advances climbed to Rs. 1,63,544 crores as of June 30, 2022, up from Rs. 1,38,944 crores the previous year, while CASA of the Bank increased to 43.07 per cent, up from 41.63 per cent. Total CASA has climbed to Rs. 1,12,012 crores on June 30, 2022, from Rs. 1,01,129 crores on June 30, 2021. Due to investments that were marked to market for a provision of Rs. 340.16 crore, the bank's operating profit for the quarter that ended on June 30, 2022, fell to Rs. 1026 crore from Rs. 1202 crore in Q1FY22.


The bank's gross non-performing assets (NPA) fell to Rs.14,769 Cr in Q1FY23 from Rs.15,952 Cr in Q1FY22, a reduction of 7.41 per cent YoY. IOB reported a total income of Rs. 5028 crore for the quarter that ended on June 30, 2022, a 2.46 per cent YoY reduction from Rs. 5155 crore for the quarter that ended on June 30, 2021.  IOB recorded a net NPA of Rs. 3,698 Cr. in Q1FY23 vs Rs. 3,998 Cr in Q1FY22, a loss of 7.50% YoY. The bank reported a net interest margin of Rs. 2.53 Cr in Q1FY23 versus Rs. 2.34 Cr. in the same quarter of the previous year.


IOB reported a gross NPA ratio of 9.03% compared to 11.48% in the same quarter of the last year and the bank reported a net NPA ratio of 2.43% compared to 3.15% in the same quarter of the last year. The bank reported a cost-to-income ratio of 56.27% compared to 53.57% in Q1FY22. IOB reported a return on assets (ROA) of 0.52% compared to 0.47% in Q1FY22 and the return on equity (ROE) of the bank comes down to 12.63% in Q1FY23 which was 14.57% in Q1FY22.


Interest income for the bank totalled Rs. 4435 crores for the quarter that ended on June 30, 2022, compared to Rs. 4,063 crores in the same quarter of the last year. Due to a rise in other income, the bank's non-interest income decreased from Rs. 1,092 crore for the quarter ended June 30, 2021 to Rs. 593 crore for the quarter ended June 30, 2022. The bank's total expenditure grew from Rs. 3,953 crores for the quarter ended June 30, 2021, to Rs. 4002 crores for Q1FY23. 


The bank's Gross NPA in the first quarter of FY23 was Rs. 14,769 crores, or 9.03 per cent, compared to Rs. 15,952 crores, or 11.48 per cent, in the first quarter of FY22. In comparison to 91.56% in Q1FY22, IOB's Provision Coverage Ratio increased to 91.86 per cent in Q1FY23.

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RBI imposes monetary penalty on this PSU bank for non-compliance

 


Before the penalty, RBI had conducted a statutory inspection for supervisory evaluation of the bank regarding its financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondence about the same.


The Reserve Bank of India (RBI) on Friday imposed a monetary penalty of Rs.57.50 lakh on the government-owned Indian Overseas Bank for non-compliance with certain directions. The penalty was related to the directions issued by RBI on Frauds – Classification and Reporting by commercial banks and select FIs.


RBI said, "This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers."


Before the penalty, RBI had conducted a statutory inspection for supervisory evaluation of the bank regarding its financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondence about the same.


As per the central bank, the inspection revealed non-compliance with the directions issued by RBI, inter-alia, to the extent the bank (i) failed to report certain instances of frauds involving ATM card cloning/skimming, to the RBI within three weeks from the date of detection, (ii) failed to ensure integrity and quality of data when it did not report credit information in CRILC on certain borrowers having aggregate exposure of Rs.5 crore and above, and (iii) linked certain floating rate loans to Micro and Small Enterprises, extended by it on or after October 01, 2019, to MCLR/Base Rate instead of an external benchmark.


Following this, RBI had issued a notice to the bank advising it to show cause as to why the penalty should not be imposed on it for failure to comply with the directions issued by the central bank.


After considering the bank’s reply to the notice and examination of additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with such directions.

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Six Indian banks sue GVK for Rs 12,114 crore: Report


Six Indian banks are reportedly suing the GVK Group for $1.5 billion or Rs 12,114 crore, according to the Times of India. The six banks include Bank of Baroda, Bank of India, Canara Bank , Icici Bank , Indian Overseas Bank, and Axis Bank.


According to the report, GVK defaulted on a $1-billion loan and a $35-million letter of credit facility given by banks in 2011, and a $160-million loan lent in 2014.


GVK Coal Developers (Singapore) and nine other GVK Group companies are being sued in the case which opens Monday.


As per the banks, GVK failed to make repayments as they fell due and failed to obtain a mining lease in the Alpha project in Queensland, Australia by December 31, 2012, which was a project milestone that had to be satisfied. The banks reportedly asked GVK in November 2020 to cancel the agreement and requested repayment. But neither GVK nor its guarantors has paid any of the sums owed, the banks claimed.


On the other hand, GVK argued that "the loans was to provide part funding for the acquisition of the Hancock companies in Australia to develop their assets — including the Alpha project — into working coal mines".


“The deterioration in the market for coal, the lack of third-party investment, legal challenges to the mining projects in the courts of Queensland, meant that very little progress was made to develop the mining assets,” GVK states. GVK states it could not obtain the mining lease owing to litigation by environmental groups but denies this was a “default”.

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Privatisation Of Bank: Two banks to be sold in the country, centre to speed up law change process

 


The Centre speed up the process of privatising two State-owned banks. News agency PTI quoted a source from the Centre as saying on Wednesday. The Modi government at the Centre had earlier amended the 'Banking Regulation Act' to pave the way for private investment in State-owned banks. According to sources, the Centre wants to pass a bill in this regard in the upcoming monsoon session of Parliament.

Union Finance Minister Nirmala Sitharaman had said last year that the Centre wants to start the process of privatising some state-owned banks. Therefore, the Bank Nationalization Acts of 1970 and 1980 will be amended and the Bank Control Act of 1949 will be amended. According to finance ministry sources, the process has begun. The government has also started preparing the draft of the 'Banking Regulation Act'. If all goes well, the amendment will be passed in the monsoon session. Of course, there is a good chance of the opposition being hindered. However, due to the majority, the government should not have any problem in passing this law.

The amendment has been passed in parliament and there will be no bar on the privatization of State-owned banks. Only then will the process of privatization of state-owned banks begin. Initially, two state-owned banks have also been listed for disinvestment. The name of which two banks will be privatised is yet to be announced by the Centre. According to sources, the Modi government initially chose four medium-sized banks for privatisation. The four banks that were placed in the initial list for privatisation are Bank of Maharashtra (BoM), Bank of India (BoI), Indian Overseas Bank(IOB) and Central Bank of India. Later, niti aayog proposed that most of the shares of Indian Overseas Bank and Central Bank of India be sold. The Modi government can go ahead with the NITI Aayog's proposal.

This is not the end of it, the government also wants to complete the privatization process of the tate-owned company BPCL quickly. Sources claim that only 52.3 per cent stake in BPCL held by the Centre will be sold. Earlier, the Modi government had taken the initiative to sell the shares of BPCL. Initially three companies showed interest in buying bpcl shares. But in the end, only one company survives in the race, the sources claim.


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IOB, Central Bank divestment on the fast-track


The Centre plans to accelerate the process of privatisation of the Indian Overseas Bank (IOB) and Central Bank of India after the two banks posted good quarterly results, finance ministry sources said. The government’s public policy think tank Niti Aayog has already proposed the names of these two PSBs to the core group of Secretaries on Disinvestment (CGD) for privatisation.


“We had to put a halt to the privatisation process in between because of the protests by bank associations and State elections. But now, after the banks registered positive results in the December quarter, it will gather steam. CGD is assessing the proposal submitted by Niti Aayog, which will then go to the Cabinet committee for final approval,” an official told this newspaper.


Another official pointed out that there is no provision for privatisation of banks in the Bank Nationalization Act. So, an amendment is needed in the Act to privatise the state-owned lenders. “A few amendments have been proposed to the Banking Regulation Act and Bank Nationalisation Act to facilitate the privatisation.


We are trying to make an attractive scheme related to employees’ compensation to avoid strikes,” he added. In the October-December quarter, Chennai-based IOB’s net profit doubled to Rs 454 crore against Rs 213 crore in the year-ago period. In the same period, Mumbai-based Central Bank of India registered a 69% increase in its net profit at Rs 279 crore.


More banks to be identified later

After the completion of the privatisation of IOB and CBI, the Centre will identify other banks for disinvestment in the coming years. The government wants only four large PSBs in the country.

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Indian Overseas Bank net profit up 154%


State-run Indian Overseas Bank (IOB) has posted a 154 per cent increase in net profit during the second quarter of the current financial year ended on September 30 to Rs 376 crore, as compared to Rs 148 crore during the same quarter in 2020-21.


The lender's total income for the reporting quarter was down marginally by about 1 per cent to Rs 5,376 crore, from Rs 5,430 during the July to September quarter of 2020-21. The bank’s managing director and chief executive officer P P Sengupta said the reasons for the better financial numbers is owing to a better outlook in the economy due to higher rates of vaccination and better performance in retail, agriculture, MSME (RAM) and corporates.


The bank’s asset quality showed signs of improvement with its gross non-performing assets falling by 11.29 per cent from Rs 17,660 crore during the second quarter in 2020-21 to Rs 15,666 during the same quarter this fiscal. During the quarter GNPA reduced by Rs 286 crore. GNPA ratios improved to 10.66 per cent from 13.64 per cent on a quarter on quarter basis. The bank came out of RBI's Prompt Corrective Action (PCA) on September 29, 2021.


Reduction in NPA for the quarter ended September 2021 stood at Rs. 1798 crore as against Rs.1,616 crore achieved for quarter ended June 2021. Net NPA during the quarter was seen at Rs 3,741 crore with a ratio of 2.77 per cent as against Rs 3,998 crore with a ratio of 3.15 per cent during the previous quarter.


The bank's net interest margin was 2.43 per cent in Q2 FY22, as against 2.57 per cent a year ago. During the quarter under review, IOB’s operating profit zoomed by 5.42 per cent to Rs 1,419 crore, as compared to Rs 1,346 crore seen during the September quarter last fiscal. Total deposits were seen up by 9 per cent to Rs.2,50,890 crore as on September end as compared to Rs 2,42,941 crore as on the quarter ended in June 2021.


Gross advances stood at Rs 1,46,940 crore during the quarter compared to Rs 1,38,944 crore during the end of Q1. The bank said that it has grown its retail and agri segments and rebalanced the advance balance by consciously reducing the stressed sector in the corporate segment.


CASA of the bank improved to 42.57 per cent during the period under review compared to 40.26 per cent during the same time last financial year. Total CASA also increased to Rs 106,806 crore as against Rs 92,436 crore during the second quarter of 2020-21. Provision Coverage Ratio improved to 92 per cent as against 89.36 per cent in Q2FY21.

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RBI removes PCA framework from this PSU bank

  


The Reserve Bank of India on September 29 announced that it has lifted the curbs on Indian Overseas Bank and taken the bank out of the Prompt Corrective Action (PCA) framework, the central bank said in a release.

The board for financial supervision reviewed the performance of Indian Overseas Bank and noted that as per its published results for year ended March 31, 2021, the bank is not in the breach of PCA parameters, RBI said.

Further the bank has provided a written commitment that it would commitment that it would comply with the norms of minimum regulatory capital norms, net NPA and leverage ratio on an ongoing basis, RBI said.

Taking all the above into consideration, it has been decided that Indian Overseas Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring, RBI said.

RBI had brought Indian Overseas Bank under the PCA framework in October 2015. The bank had been requesting to the central bank to take it out of the PCA framework.

The bank's MD & CEO, Partha Pratim Sengupta had said post the Q4FY21 results that, “As far as all the PCA ratios are concerned, we have been achieving it in the past quarters also, barring one ratio, which is the leverage ratio. With the ploughing back of the profits and also with the infusion of funds by the government of India, we are very, very comfortable in all the parameters.”

Indian Overseas Bank had received Rs 4,100 crore from the government.

Under the PCA norms, the central bank imposes business restrictions on banks having weak financial metrics and the restrictions are decided on a case to case basis.

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Indian Overseas Bank(IOB) Q1 results: Net profit doubles as provisions decline

 


Chennai-based public sector lender Indian Overseas Bank (IOB) on Tuesday reported a 170% jump in its net profit to `327 crore for the first quarter of this fiscal as compared to Rs 121 crore in the corresponding quarter last fiscal.


The bank has attributed the growth in the bottom line to an increase in other income and a robust recovery during the quarter. The total income of the bank stood at Rs 5,155 crore as against Rs 5,234 crore in the corresponding period last year.


Speaking to media persons in a virtual interaction, Partha Pratim Sengupta, MD & CEO, IOB, said after making losses for 18 quarters, the bank has started making profits since the March 2020 quarter, and this quarter it added around Rs 200 crore to the profit. “We have been making profits and have fulfilled all the requirements to come out of the prompt corrective action. The regulator is examining as we have furnished all the details,” he said, adding that it is now for the RBI to take a call on it.


Interest income of the bank stood at Rs 4,063 crore for the quarter as against Rs 4,302 crore, while non-interest income was at Rs 1,092 crore as compared to Rs 932 crore due to increase in other income.


He said the bank could make a decent recovery in the first quarter despite the impact of the second wave of the pandemic. “While fresh slippage was at Rs 1,158 crore, cash recovery was itself to the tune of Rs 1,130 crore, offsetting the impact of bad assets,” he said.


IOB’s gross NPAs stood at Rs 15,952 crore, with a ratio of 11.48% as against 18,291 crore with a ratio of 13.90%. It achieved a total reduction in NPAs of Rs 1,616 crore in Q1FY22 as against the NPA reduction of Rs 1,969 crore.


Net NPAs were at Rs 3,998 crore, with a ratio of 3.15% as against Rs 6,081 crore, with a ratio of 5.10%, a decline of Rs 2,083 crore in absolute terms. Provision coverage ratio improved to 91.36% from 87.97%.


Sengupta said the bank has approval to raise Rs 2,000 crore as tier I capital, Rs 1,000 crore as tier II bonds and will look to raise funds as and when required. “As of now, we are comfortably capitalised with CRAR of 15.48%. First we will try to raise the tier II bonds by November, and later on will decide when to go for tier I funds,” he said.


On the advances growth, he said the bank will go for an incremental increase of Rs 14,000 crore to Rs 15,000 crore, over the last year. “While retail, agri and MSME sector will be our focus area, corporate book needs to be also grown. Though we will be cautious, we will go for rated corporate entities,” he said.

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Government may shortlist two PSU banks for privatization


 The Centre has shortlisted Central Bank of India (CBI) and Indian Overseas Bank (IOB) for divestment.
The two state-run banks might see 51 percent sale in the first phase of disinvestment.


The government will amend the Banking Regulations Act, and some other banking laws for divestment, the news channel reported.

Following the news, shares of CBI and IOB surged 20 percent on June 21.

The weak financial metrics of lenders like CBI and IOB could lead to unexpected hurdles in the government's plan to privatise the lenders, banking analysts.

Both the IOB and CBI are currently under the Prompt Corrective Action (PCA) framework imposed by the Reserve Bank of India (RBI). Under the PCA framework, the central bank imposes certain business restrictions on lenders with weak financial metrics.

The Centre has set an ambitious divestment target of Rs 1.75 lakh crore for FY22.

The government's plans to sell its stakes in Air India, Bharat Petroleum Corporation (BPCL), Shipping Corporation of India and some other companies have been disrupted due to the COVID-19 pandemic
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Indian Overseas Bank(IOB) Q4 profit jump over two times

 


State-owned Indian Overseas Bank (IOB) on Monday reported a jump of over two times in its net profit at Rs 349.77 crore in the last quarter of the fiscal ended March 2021.

The bank had posted a net profit of Rs 143.79 crore in the same period a year ago.

Total income during Q4FY21 rose to Rs 6,073.80 crore as against Rs 5,484.06 crore in Q4FY20, IOB said in a regulatory filing.

Provisions for bad loans and contingencies for the reported quarter increased to Rs 1,380.46 crore as against Rs 1,060.38 crore parked aside in the corresponding period a year earlier.

For the full year 2020-21, the bank reported a net profit of Rs 831.47 crore. There was a net loss of Rs 8,527.40 crore in 2019-20.

Total income during the year increased to Rs 22,524.55 crore from Rs 20,712.48 crore in the previous fiscal year.

Bank's asset quality showed improvement with the gross non-performing assets (NPAs) falling to 11.69 per cent of the gross advances as of March 31, 2021 from 14.78 per cent by year ago same period.

In value terms, the gross NPAs or bad loans were of the order of Rs 16,323.18 crore, down from Rs 19,912.70 crore.

Net NPAs fell to 3.58 per cent (Rs 4,577.59 crore) from 5.44 per cent (Rs 6,602.80 crore).

The bank said its board of directors has approved the capital plan for 2021-22 under which it will issue equity shares up to a maximum extent of 125 crore shares by way of follow on public offer/rights issue.

The issue may be with or without participation from the government or to qualified institutional buyers (QIBs), the lender said.

It may be also on a preferential basis to LIC and other insurance companies or mutual funds/QIBs. The issuance of shares is subject to shareholders approval, IOB said.

Besides, the board also approved to raise tier II capital by issuing Basel III compliant bonds up to Rs 1,000 crore in one or more tranches. The issue may be through a private placement or to retail segment by public issue, either domestically or overseas, it added.

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Government is considering mid-sized to small banks for its first round of privatisation.


Government has shortlisted four mid-sized state-run banks for privatization, under a new push to sell state assets and shore up government revenues, three government sources said.


Privatisation of the banking sector, which is dominated by state-run behemoths with hundreds of thousands of employees, is politically risky because it could put jobs at risk but Prime Minister Narendra Modi's administration aims to make a start with second-tier banks.


The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India, two officials told Reuters on condition of anonymity as the matter is not yet public.


Two of those banks will be selected for sale in the 2021/2022 financial year which begins in April, the officials said. The shortlist has not previously been reported.


The government is considering mid-sized to small banks for its first round of privatisation to test the waters. In the coming years it could also look at some of the country's bigger banks, the officials said.


The government, however, will continue to hold a majority stake in India's largest lender State Bank of India, which is seen as a 'strategic bank' for implementing initiatives such as expanding rural credit.


A finance ministry spokesman declined to comment on the matter.


India's deepest economic contraction on record caused by the pandemic is driving the push for bolder reforms, economists say.


Government also wants to overhaul a banking sector reeling under a heavy load of non-performing assets, which are likely to rise further once banks are allowed to categorise loans that soured during the pandemic as bad.


PM Modi's office initially wanted four banks to be put up for sale in the coming fiscal year, but officials have advised caution fearing resistance from unions representing the employees.

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Indian Overseas Bank (IOB) reports net profit in Q3


Chennai-based public sector lender Indian Overseas Bank (IOB) on Tuesday reported a net profit of Rs 212.87 crore for the third quarter of FY21 as compared to a net loss of Rs 6,075 crore in the corresponding quarter of the previous financial year.


The bank has recorded an increase of 11.3% in its total income to Rs 5,786.54 crore as against Rs 5,197.94 crore. IOB, which was under Prompt Corrective Action (PCA), said it has been posting profits for four consecutive quarters and almost fulfilled all the requirements to come out of the PCA.


Speaking to media persons after releasing the earning performance, through virtual mode, Partha Pratim Sengupta, MD & CEO, IOB, said the bank plans to come out of PCA by focusing on recovery, low-cost deposits and less capital consuming advances.


“For the last four quarters, we have been making profit consistently. When compared with Q3 performance of FY20, there was a marked improvement in all key parameters. It is a matter of time for us to exit PCA and is up to the regulator to decide,” he said.


IOB had received a capital infusion of over Rs 8,000 crore in two tranches during the last two quarters of the last financial year, which helped the loss-making bank restart the business with a clean slate. Coupled with recovery and asset-light advances, the bank could achieve profits during the last four quarters.


The MD said there has been perceptible change in NPA levels achieved through recovery measures.


“Currently, the bank has a carry forward loss of Rs 17,500 crore. Our aim is to recover at least Rs 1,000 crore per quarter. In the first quarter of FY21, we recovered about Rs 200 crore due to lockdown, followed by Rs.760 crore and Rs 1,055 crore, respectively. Going forward, the focus will be on recovery in excess of Rs 1,000 crore and it will add to our bottom line,” he said.


According to him, IOB has evolved a policy of not taking fresh exposures in stressed sectors while the bank had exited from accounts in the stressed sectors, wherever feasible.


During the quarter, gross non-performing assets (GNPAs) reduced to Rs 16,753 crore from Rs 23734 crore and stood at 12.19% as against 17.12% and net NPA was contained at Rs 3,905 crore, as compared to 7,087 crore, which was 3.13% as against 5.81%. The provision coverage ratio improved to 91.91% from 86.20%.


While interest income contracted to Rs 4,244 crore from Rs 4,352 crore, other income rose 82.36 % to Rs 1,542.82 crore. Net interest margin stood at 2.45%.


He said around Rs 18,000 crore worth NPAs are awaiting NCLT’s resolution, while Rs 3,000 crore assets was expected to be restructured.


IOB had board’s approval to raise up to Rs 5,500 crore capital. He said the bank needed only Rs3,000 crore and the timing of the issue will be decided at a later date.

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IOB loan fraud : ED says accused who defrauded Indian Overseas Bank paid managers' flight, hotel bills

                                 


Probing a Rs 299-crore Indian Overseas Bank loan fraud case, similar to the alleged USD 2 billion worth PNB swindle, the Enforcement Directorate has found that the accused "paid" for the air travel and hotel stay of a senior bank manager and his family as kickbacks. The central probe agency said "lapses" were also detected on the part of at least three managers — Anil Kumar, P C Rana and N Chokalingam — of the IOB branch in Chandigarh, "as well as the concurrent auditors."

The ED case is related to its criminal money laundering investigation "in a case related to buyers credit fraud of Rs 299.14 crore at the IOB, Chandigarh". The agency took congnisance of an FIR filed by the Central Bureau of Investigation (CBI), to file a case under various sections of the Prevention of Money Laundering Act (PMLA) against IOB Assistant Manager Ashu Mehra, properitor of heights international company Amanpreet Singh Sodhi, owner of vision procon company Dinesh Kumar and directors of a firm saibhakti impex Pvt ltd — Gaurav Kirpal and Aman Kirpal.

"A charge sheet was filed by the CBI against the accused revealing wrongful loss to the tune of Rs 299.14 crore to the bank on account of fraudulent unpaid LOUs (letter of undertaking) and that an amount of Rs 11.36 crore commission for 24 LOUs was also not received by the bank," the ED said. A similar modus operandi of misusing the LOUs has been alleged by probe agencies in the Brady House branch (Mumbai) of the Punjab National Bank (PNB) that led to a fraud estimated to be worth USD 2 billion, which came to light in 2018.

Diamond merchants Nirav Modi and his uncle Mehul Choksi have been alleged as the masterminds of this swindling, identified as one of the biggest case of bank loan fraud in the country. About the latest case, the ED said its probe found that the accused Amanpreet Singh Sodhi, Dinesh Kumar and Gaurav Kirpal "conspired" with IOB assistant manager Ashu Mehra "for illegal diversion of funds to the bank accounts of fraudulent buyers on behalf of Indian import firms."

"These amounts were first credited by the overseas funding bank — Bank of Baroda, Bahamas and PNB, Dubai — into the HSBC Account of the Hong Kong-based export company Colour Wave (HK) Ltd though no imports took place." "The accumulated amount in the HSBC Account was further remitted to India in the accounts of accused companies by showing it as adjustments for exports of third-party payments," the ED alleged.

It was found, the ED said, that the goods were either exported by the accused to different buyers or consignees by resorting "to gross over-valuation or in some cases there was "no export. "In this manner the accused have generated the proceeds of crime by resorting to trade-based money laundering," the ED claimed.

It was found that "payments for the air travels and hotel stays of the accused Ashu Mehra and his family members was borne by accused Dinesh Kumar and Gaurav Kirpal", the agency said. The agency has attached properties worth over Rs 91 crore of various accused involved in the case till now, with an attachment of Rs 6.03 crore being done recently.

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Indian Overseas Bank(IOB) Q2 turns around to profits on lower provisioning


State-owned Indian Overseas Bank (IOB) on November 6 reported a net profit of Rs 148 crore for the second quarter of current fiscal as bad loans and provisions declined.

The Chennai-headquartered lender had registered a net loss of Rs 2,254 crore in July-September quarter a year ago. Sequentially, net profit grew 22.3 percent from Rs 121 crore in June quarter of this fiscal.

Total income rose 8.1 percent to Rs 5,431 crore during the quarter under review as against Rs 5,024 crore in the same quarter of 2019-20, Indian Overseas Bank (IOB) said in a regulatory filing. Interest income increased to Rs 4,363 crore from Rs 4,276 crore a year ago.

There was a substantial improvement in bank's asset quality as the gross non-performing assets (NPAs) plunged to 13.04 percent of the gross advances as of September 30, 2020 from 20 percent at the end of September 2019. In value terms, gross NPAs or bad loans fell to Rs 17,659.63 crore as against Rs 28,673.95 crore a year ago.

Net NPAs reduced to 4.30 percent (Rs 5,290.60 crore) from 9.84 percent (Rs 12,507.97 crore) a year ago. Total fresh slippages (other debits to existing NPA accounts) for September quarter were contained at Rs 292 crore, the lender said.

"Total cash recovery for September 2020 was Rs 513 crore (including cash recovery) as against Rs 172 crore in June 2020," it said.

Provisions for bad loans and contingencies fell to Rs 1,192.55 crore during the quarter under review from Rs 2,996.04 crore set aside in the year-ago quarter.

IOB said it has made required provisioning in advances in specific accounts so as to improve net NPAs. The bank's gross advances fell to Rs 1,35,469 crore as of September 30, 2020 from Rs 1,43,350 crore a year ago. However, it was slightly higher from Rs 1,31,565 crore at the end of June 2020.

"The bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts. The bank has also exited from accounts in the stressed sectors, wherever feasible," it said. The bank has grown under retail and agri sector and re-balanced the advance balance by consciously reducing the stressed sector in corporate segment, it added.

Provision coverage ratio improved to 89.36 percent at the end of September 2020 as against 75.85 percent at the end of September 2019. IOB's average cost of deposit reduced to 4.89 percent from 5.41 percent, while net interest margin improved to 2.18 percent for the quarter as against 1.86 percent in the year-ago period.

The bank said on relaxation of COVID-19 related lockdowns, it started mega e-auction process pan-India for sale of properties. The first such e-auction was conducted, fetching countable recovery by sale of properties and such e-auctions are planned to be conducted every month like in 2019-20, IOB said.

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Indian Overseas Bank(IOB) reports net profit in Q1

Indian Overseas Bank on Thursday posted a net profit of Rs 121 crore for June quarter 2020 mainly due to fall in bad loans. The state-owned lender posted a net loss of Rs 342.08 crore for the same quarter a year ago.

In March quarter, the bank had a profit of Rs 144 crore, Indian Overseas Bank said in a regulatory filing.

Total income of the bank during April-June 2020-21 rose to Rs 5,233.63 crore from Rs 5,006.48 crore in the same period of the previous fiscal, mainly due to increase in treasury income, it said.

Interest income stood at Rs 4,302 crore for the quarter as against Rs 4,336.39 crore a year ago mainly due to decrease in MCLR (marginal cost of funds based lending rate), it added.

Provisions and contingencies for the quarter were reduced to Rs 969.52 crore as against Rs 1,157.82 crore parked aside for the year- ago period, as the bad loan proportion of the bank came down significantly.

Gross non-performing assets (NPAs) were cut to 13.90 per cent of gross advances as on June 30, 2020 from 22.53 per cent by the same period of 2019. In value terms, gross NPAs or bad loans came down to Rs 18,290.84 crore from Rs 33,262 crore.

Likewise, net NPAs dipped to 5.10 per cent (Rs 6,080.89 crore) from 11.04 per cent (Rs 14,173.84 crore).

Total deposits increased to Rs 2.26 lakh crore as on June 30, 2020 as against Rs 2.21 lakh crore by June last year, it said. Total business was up at Rs 4.41 lakh crore from Rs 4.37 lakh crore.

Gross advances stood at Rs 1.32 lakh crore by June-end as against Rs 1.47 lakh crore by the year-ago same period, IOB said, adding the bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts.


"The bank has also exited from accounts in the stressed sectors to improve the quality of assets," said the Chennai-headquartered lender.

The net interest margin -- interest earned minus interest expended -- improved to 2.08 per cent from 2.01 per cent.

IOB said it made recovery of Rs 1,991 crore during June 2020 quarter as against recovery of Rs 2,238 crore a year ago and the total fresh slippage (other than debits to existing NPA accounts) for the quarter stood at Rs 257 crore.
Provision coverage ratio improved to 87.97 per cent from 72.24 per cent, it said.
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Privatization Of PSU Banks, Insurance Starts Soon


Privatization of the PSUs will now be resumed by the Government of India and about four unmerged banks and insurance companies will be privatized in the next part of the project.


The privatization of PSU Banks was postponed in 2020 due to the outbreak of the Coronavirus pandemic, which put the whole process on hold because of their low valuations and mounting stressed assets.

As per reports, Punjab & Sind Bank, IOB, Bank of Maharashtra might be privatized, along with state-run insurance companies, such as National Insurance Company, United India Insurance, and Oriental Insurance Company.

Prior to this, the Government had also sold their shares in the Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI), THDC India, and NEEPCO. The Govt also announced that it will also sell its 30% stake from the state run rail hauler Container Corp of India (Concor).

Recently, the Government of India had also announced economic reforms in wake of the Coronavirus pandemic, wherein it was declared that every PSU in India will be now privatized, except 4 in strategic sectors.

As per reports, a draft cabinet note has already been sent for inter-ministerial consultations to identity strategic and non-strategic sectors. 

A government official close to the development said, “A broader policy will look at sectors that have market imperfections due to the government’s presence, where the private sector can take the lead and ensure that the monopoly should not happen due to state-run companies.”

He also said that sectors like banks, insurance, space, defence will be privatized.


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Indian Overseas Bank(IOB) posts net profit in Q4

State-owned Indian Overseas Bank has booked net profit after 18 straight quarters while reported net non-performing below 6 percent for two consecutive quarters, making itself a contender to get out of Reserve Bank of India's prompt corrective action (PCA) framework, which puts restrictions on lending, branch expansion and dividend distribution.

IOB's net profit was at Rs 144 crore in the quarter to March compared with Rs 199 crore net loss in the year ago period.

"Making profit will not be a one-off thing. This is going to be sustainable," IOB chief executive Karnam Sekar said after the release of the bank's quarterly earnings. He said that provision coverage ratio was at 87 percent at the end of the reporting period March from 71 percent a year back, and therefore future provision requirement would come down.

Sekar is slated to hang up his boots at the end of June while State Bank of India's deputy managing director Partha Pratim Sengupta's is tipped to succeed him.

The bank's operating profit marginally rose to Rs 1144 crore compared with Rs 1132 crore in period under review while steep fall in provisioning to Rs 1060 crore from 4502 crore helped the bank to be back in black.

Its gross advances shrunk to Rs 1.35 lakh crore at the end of March against Rs 1,52 lakh crore a year back, The CEO said that its lending very selectively and not taking fresh exposures in stressed sectors.

"The situation continues lo be uncertain and the bank ls closely monitoring the situation," the bank said in its regulatory filing to stock exchanges.
Its gross NPA ratio improved to 14.78 percent as on March, down from 17.12 percent a quarter back while the net ratio improved further to 5.44 percent from 5.81 percent in the same period.

IOB has restructured 19043 MSME accounts and treated them as standard assets aggregating to Rs 694 crore as on Morch 31. It has also made an adhoc provision of Rs 460 crore towards revision of wages which is due since November 2017.
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