IOB Q1 FY 22 Results: Standalone PAT rises 170% to Rs 327 Cr

Mumbai/ Delhi: (IOB Q1 FY 22 Results) State-owned Indian Overseas Bank (IOB) reported a 170 percent jump in its standalone profit after tax of Rs 327 crore for June 2021 quarter, helped by better recoveries.

In the year-ago quarter, the PSB's standalone profit after tax stood at Rs 121 crore. "This year (in Q1 FY22), around Rs 1,158 crore of slippages happened, and it was offset by higher cash recoveries of Rs 1,125 crore. Because of this, we had to provide less (for non-performing assets) compared to the last year," IOB Managing Director and CEO Partha Pratim Sengupta said on Tuesday.

However, the total income of the PSB during Q1FY22 was down at Rs 5,155 crore as against Rs 5,234 crore in Q1FY21. Interest income also went down from Rs 4,302 crore for the quarter ended June 30, 2020, to Rs 4,063 crore, IOB said in a regulatory filing.

The Chennai-headquartered lender said it reduced non-performing assets (NPAs) worth Rs 1,616 crore during the quarter, as against Rs 1,969 crore in the June 2020 quarter. The Gross NPA ratio improved to 11.48 percent from 13.90 percent. The gross NPAs were worth Rs 15,952 crore, down from Rs 18,291 crore. Net NPAs fell to 3.15 percent (Rs 3,998 crore) from 5.10 percent (Rs 6,081 crore).

The provision coverage ratio stood at 91.56 percent against 87.97 percent. Provisions and contingencies for the quarter ended June 2021 were Rs 868 crore, compared with Rs 970 crore in the year-ago quarter.

Sengupta said the bank has set a recovery target of Rs 4,500 crore for the financial year 2022. During the quarter, it wrote off Rs 793 crore of bad loans. It also sold Rs 23.18 crore of NPAs to asset reconstruction companies (ARCs) in the April-June period. The total capital-to-risk asset ratio (CRAR) stood at 15.48 percent.

Gross advances increased to Rs 1,38,944 crore, from Rs 1,31,565 crore. "We have evolved a policy of not taking fresh exposures in stressed sectors, below hurdle-rated accounts and BB and below rated accounts," IOB said in the filing. The PSB has also exited from accounts in the stressed sectors to improve the quality of assets, it added.

The bank plans to come out of the Reserve Bank of India's prompt corrective action (PCA) framework by focusing on recovery, low-cost deposits, and less capital-consuming advances.

"It (application for exiting PCA) is under consideration of the regulator. We have replied to their queries. They must be looking at the various other aspects before taking a decision in this regard. We are waiting for it," Sengupta said.

On capital raising, he said the bank may look at raising funds through tier-II bonds in November.

The IOB shares closed at Rs 23.35 apiece, down 2.91 percent on the BSE.

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