Higher provisioning has taken the sheen of Chennai-based public sector lender Indian Overseas Bank?s (IOB) first quarter earnings with the bank posting a 46.1% drop in net profit at R125.8 crore against R233.4 crore in the same quarter in the last fiscal. The asset quality of the bank has also taken a severe beating with fresh slippage of R1,668.02 crore reported during the quarter. However, the total income of the bank has increased to R6,187.15 crore compared with R5,402.85 crore, registering a growth of 14.25% growth.
Speaking to reporters after releasing the results, M Narendra, chairman and managing director, IOB, said the higher provisioning towards restructured assets, wage arrears and income tax along with increase in NPA have dented the net profit of the bank. The bank has witnessed a slippage of Rs 1668.02 crore to the bad assets during the first quarter as against Rs 865.02 crore in the same quarter last fiscal.
? For NPA alone we had to make Rs 723.21 crore provisioning this quarter as against Rs 332 crore done in the same quarter last fiscal. We will be now focussing on NPA recovery and increased mobilisation of CASA accounts for driving further growth,? Narendra said.
The gross NPA of the bank as of June 30, 2013, stood at Rs 7,431.69 crore as against Rs 4, 409. 70 crore, with gross NPA percentage of 4.45% and 2.97 respectively. The provision coverage stood at 58.69%.
The total business of the bank grew from Rs 3, 33, 250 crore to Rs 3, 63, 087 crore, recording an year on year growth of 8.95%. Total deposits grew from Rs 1, 84, 884 crore to Rs 1, 96, 213 crore, posting a growth of 6.13%. The gross advances increased from Rs 1,48,366 crore to Rs 1,66,874 crore, logging a growth of 12.47% .
