IOB posts 21% jump in Q3 FY25 net profit

CHENNAI: Indian Overseas Bank (IOB) on Monday reported 20.9% growth in net profit at Rs 874 crore in the quarter ended Dec 31, 2024 against Rs 723 crore in the corresponding quarter last year.
The bank will raise Rs 2,000 crore through qualified institutional placement (QIP) during the current quarter (Q4) of FY25, which will bring down the Centre's shareholding in the Chennai-headquartered bank by 2%-2.5%. Currently, the Union govt holds 96.3% share with the public sector bank.
The interest income increased by 15.2% to Rs 7,112 crore in the Oct-Dec quarter of 2024-25 when compared with Rs 6,176 crore during the year ago quarter. Its net interest margin (NIM) stood at 3.3% during the quarter ended Dec 31, 2024. The CASA had 9.5% Y-o-Y growth at Rs 1,32,338 crore as of Dec 31, 2024 from Rs 1,20,915 crore during the corresponding quarter of the previous year. The CASA ratio stood at 43.4% for the quarter ended Dec 31, 2024.
The gross NPA ratio declined to 2.55% in Q3 FY25, which was at 3.9% as of Dec 31, 2023. The net NPA ratio reduced to 0.42% in the third quarter of FY25 from 0.62% in the same quarter in the previous year.
The bank's recovery stood at Rs 956.6 crore for the quarter ended Dec 31, 2024, a decrease by 15.1% over Rs 1,126 crore in the corresponding quarter of last year. Of this, recovery from written-off accounts stood at Rs 676.6 crore for the quarter.
On a Y-o-Y basis, the recovery plunged by 35.5%, which was at Rs 1,482 crore in the quarter ended Sept 30, 2024. "On a Y-o-Y basis, the recovery has been reduced by Rs 526 crore. This is because we got two major recoveries in NCLT admitted accounts during the Sept quarter (Q2 FY25) and the total amount we got during Sept quarter was Rs 552 crore. The NCLT resolution of this type of recovery is not very frequent that happens every quarter," IOB MD & CEO Ajay Kumar Srivastava told reporters here.
Noting that the bank has targeted a recovery of Rs 5,500 crore by the end of FY25, he said more than Rs 3,000 crore was already recovered in the current fiscal.
Its total deposits increased by 9.7% Y-o-Y at Rs 3,05,121 crore in the quarter ended Dec 31, 2024 against Rs 2,78,046 crore during the corresponding quarter last year. However, deposits dropped by 1.8% on a Y-o-Y basis at Rs 3,10,652 crore as of Sept 30, 2024.
According to Srivastava, the total deposits include retail term deposits, CASA and bulk deposits. "Our bulk deposits was Rs 23,467 crore as of Sept 30, 2024 and reduced to Rs 16,176 crore as of Dec 31, 2024. We reduced about Rs 7,000 crore in bulk deposits purposely because it is high cost. So, we have allowed it to go out of the balance sheet," he added.