Indian Overseas Bank has announced a 17.12% rise in net profit to Rs 650 crore for the quarter ending March 2023, up from Rs 555 crore in the previous quarter. Year on year, the net profit of the bank has grown by 22.75% to Rs 2,099 crore from Rs 1,710 crore in the financial year 2021-22. This growth is attributed to the strong increase in net interest income and an improvement in asset quality.
The bank has also seen a decrease in both gross NPA and net NPA. Gross NPA of the bank decreased to Rs 14,072 crore (7.44%) as of March 31, 2023, from Rs 14,333 crore (8.19%) in the same period in 2022. Similarly, the net NPA of the bank has decreased to Rs 3,266 crore (1.83%) from Rs 4,000 crore (2.43%) for the same period. The provision requirement for NPA has decreased by 26.52% to Rs 2,499 crore as of March 31, 2023, due to an improvement in asset quality.
The bank’s net interest margin stood at 3.20% for the quarter ended March 2023, and the return on assets increased to 0.83% from 0.73% in the previous quarter. The capital adequacy ratio has improved to 16.10% as of March 31, 2023, from 15.16% as of December 31, 2022, and 13.83% as of March 31, 2022. The net interest income of the bank has increased by 30.82% to Rs 8,256 crore as of March 31, 2023, from Rs 6,311 crore in the previous financial year, driven by strong credit growth.
Indian Overseas Bank also announced its capital raising plan for the year 2023-24, planning to raise paid-up equity share capital amounting to Rs 1,000 crore by way of various options available. The bank is also planning to issue Basel III Tier II bonds to a maximum extent of Rs 1,000 crore. Furthermore, the bank has a branch expansion plan for the year 2023-24, planning to open 40 new branches across India.