IOB seeks investors’ nod for QIP of ~1,300 crore

Ailing public sector lender Indian Overseas Bank (IOB) has finalised a turnaround strategy, with a focus on bad loan recoveries, credit monitoring, human resource management and development.

The bank is also moving an enabling resolution to raise about ~1,300 crore from qualified institutional buyers. Qualified institutional placement (QIP) allows an Indianlisted company to raise capital from its domestic markets without the need to submit any pre-issue filings to market regulators.

The bank has sought investors’ nod for the QIP.

R Subramaniakumar, the bank’s managing director and chief executive officer, said in a letter to shareholders that the bank has finalised a turnaround strategy to improve operating efficiency and productivity.

IOB’s principal focus is on maximising recovery and minimising fresh slippages, as gross non-performing assets (NPAs) stood at ~35,098 crore crore at the end of March 2017.

The bank has made a recovery of ~9,014 crore including ~803 crore in written-off accounts. NPAs to the extent of ~3,629 crore were upgraded during the year. The bank said regional heads were advised to visit borrowers, who have defaulted on loans, at least four days in a week and a 15-member special recovery team has been formed in every region.

A daily recovery report mechanism and outreach programme was introduced wherein all the 434,000 NPA borrowers of up to ~1 crore were met personally within a quarter. The gross NPAs stood at ~35,098 crore for March 2017 as against ~30,049 crore in 2015-16.

The higher provision for NPAs, ~7,067 crore, forced the bank to report a net loss of ~3,417 crore in FY17, up from the loss of ~2,897 crore a year ago.