IOB confident of posting full-year profit for FY20
Public sector lender Indian Overseas Bank (IOB), which has been in the red due to high NPAs, could see full-year profit in 2019-20. The optimism comes in the backdrop of the number of the bank’s branches earning profits, growth in operating profit and net interest income (NII).
The bank has seen a reduction in non-performing assets (NPAs) and is confident that it will be able to address its NPAs worth ~40 billion. “The crisis and consolidation phases are over. The bank is stepping into leveraging phase and it would continue for the next six months. The strategies, which were adopted, will not only help turn around the bank, but will also ensure that it is sustainable,” said R Subramaniakumar, chief executive officer and managing director, IOB.
He is confident that the bank will make quarterly profit in Q4 of the current fiscal year, after 12 quarters, and will see a full-year profit in 201920.
IOB had been making losses in the past four years. In 2014-15, the loss was at ~4.54 billion, which rose to ~62.99 billion in 2017-18. The loss was mainly due to high provisions that rose to 162 per cent from ~37.77 billion to ~99.29 billion during this period.
The losses was mainly due to its high exposure to corporate segment, which accounts for nearly 65 per cent of the total NPAs, which is around ~381 billion.
Subramaniakumar said of the total corporate exposure, nearly 65 per cent have been referred to the NCLT and added that there will be a solution to NPAs of almost ~40 billion, including about ~16 billion of Bhushan Power.