IOB Q4 profit jumps 45.51%; eyes 13% loan growth in FY27

New Delhi: State-owned lender Indian Overseas Bank (IOB) on Wednesday reported a 45.51 percent rise in its consolidated net profit to Rs 1,556.15 crore in the fourth quarter of FY26, on core interest income growth and asset quality improvements.

In the year-ago period, the bank reported a profit of Rs 1,091.94 crore. On a sequential basis, net profit jumped by 9.04 percent.

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"Higher credit, CASA (current and savings accounts) growth, and non-interest income, the sale of PSLC and fee-based income, combined, (are) some of the things that have resulted into good numbers," managing director and chief executive officer, Ajay Kumar Srivastava, told PTI.

The core net interest income rose 11.11 percent year-on-year to Rs 3,470 crore in Q4 FY26, from Rs 3,123 crore in the corresponding quarter a year ago.

In the reporting quarter, domestic net interest margins (NIM) of the bank compressed to 3.35 percent, from 3.42 percent in the quarter-ago period, and 3.77 percent in the year-ago period.

Srivastava attributed the fall in NIMs to the transmission of a 1.25 percent reduction in the repo rate by the Reserve Bank of India (RBI) since February last year.

The advances of the bank have seen a sharp growth of 24.16 percent year-on-year to Rs 3.10 lakh crore in Q4 FY26, from Rs 2.50 lakh crore in the corresponding quarter last year.

The bank is targeting 12-13 percent advances growth in FY27, with some impact on the MSME and a few corporate accounts having supply lines from Middle East countries, Srivastava said.

Srivastava added that the bank has created a floating provision of around Rs 400 crore to meet any eventuality arising out of the West Asia crisis if it continues.

"MSME accounts and a few corporates having supply lines from the Gulf or the business relationship is only dependent on West Asian countries, only those accounts will be impacted," Srivastava said

Total deposits of the bank increased by 18.03 percent year-on-year in the reporting quarter to Rs 3.68 lakh crore, from Rs 3.12 lakh crore in the year-ago period.

CASA deposits registered a growth of 10.85 percent year-on-year to Rs 1.51 lakh crore as on March 31, 2026. Domestic CASA ratio increased by 0.17 percent to 41.46 percent as on March 31, 2026, from 41.29 percent as on December 31, 2025.

Similarly, the Global CASA ratio increased by 0.14 percent to 40.99 percent as on March 31, 2026, from 40.85 percent as on December 31, 2025. Retail term deposit increased by 17.81 percent to Rs 1.84 lakh crore, according to the press release.

Srivastava expects the lender to report a 13-14 percent growth in its deposit base in FY27, as the bank is aggressively onboarding new customers, and targeting the existing customers who used to have a good balance in their accounts once upon a time, but of late, they have stopped transacting.

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On the asset quality front, the bank has seen a sharp improvement in the asset quality, with the gross non-performing assets ratio at 1.42 percent in Q4FY26, as compared to 1.54 percent in Q3FY26, and 2.14 percent in the year-ago period.

The bank is targeting Rs 3,600 crore of recoveries and upgrades in FY27, which will include all types of accounts. Srivastava said that the recoveries from these accounts will support the bottomline in FY27.

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