New Delhi: State-owned Indian Overseas Bank (IOB) on Wednesday posted a 28 percent increase in net profit at Rs 500 crore in the June quarter, mainly due to a decline in bad loans.

The Chennai-based lender had posted a net profit of Rs 392 crore in the year-ago period.

The total income in the first quarter of the current fiscal rose to Rs 6,227 crore against Rs 5,028 crore, IOB said in a regulatory filing.

The lender's interest income also increased to Rs 5,424 crore from Rs 4,435 crore in the same quarter a year ago.

On the asset quality side, the bank witnessed an improvement with the gross Non-Performing Assets (NPAs) easing to 7.13 percent of the gross advances by June 2023 as against 9.12 percent a year ago.

The net NPA too declined to 1.44 percent over 2.43 percent in the same period of the previous financial year.

However, provisions for bad loans increased to Rs 809 crore as compared to Rs 133 crore a year ago.

Provision Coverage Ratio is improved to 94.03 percent as on June 30, 2023 from 91.86 percent at the end of June 2022.

The capital adequacy ratio of the bank improved to 16.56 percent at the end of June over 14.79 percent a year ago.

During the quarter, the bank made a provision of Rs 180 crore on an ad-hoc basis for arrears pursuant to the proposed 12th bipartite settlement due from November 1, 2022.

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