IOB Q2 profit at Rs 148 cr due to multiple steps

CHENNAI: A combination of increased income, boosted by profits on sale of investments, reduced interest outgo, expenses and provisions, has enabled the Indian Overseas Bank (IOB) to post a net profit of Rs 148 crore for the second quarter of the FY21, its MD-CEO PP Sengupta said on Friday.

He also said the bank will be carrying out two more electronic auctions of loan properties to reduce its bad loans.

Addressing media, Sengupta said IOB closed the second quarter with a net profit of Rs 148 crore up from a net loss of Rs 2,254 crore posted during the corresponding period of the previous year.

For the period under review, the bank had earned a total income of Rs 5,431 crore (including Rs 426 crore profit on sale of investments) up from Rs 5,024 crore earned during the same period in FY20.

The bank’s total expenses went down to Rs 4,084 crore during Q2 of FY21 from Rs 4,278 crore expended during previous year’s corresponding period.

Similarly, the total provisions went down to Rs 1,198 crore in Q2 from Rs 3,000 crore provided during Q2 of FY20.

Sengupta said the bank has been lowering its interest rates on deposits and its impact on the interest outgo has started showing.

He said the bank has been posting losses for the past 18 quarters continuously and in some quarters, huge losses. For the first time in 18 quarters, the IOB has shown a net profit.

Sengupta said the bank had completed on electronic auction of loan properties and realised about Rs 38 crore. “Two more electronic auctions are slated in November and December. The beneficial impact of these auctions is that many borrowers are coming forward for one-time settlement of their loan accounts,” he said.

The bank’s net NPA at September 30 stood at Rs 5,291 cr with ratio of 4.30 pc against Rs 6,081 crore with ratio of 5.10 per cent as on June 30, 2020, thus reducing NPA by Rs 790 crore in absolute terms