Indian Overseas Bank posts ₹121 crore net profit in Q1

State-owned Indian Overseas Bank on Thursday, reported a standalone net profit of ₹120.69 crore for the June quarter of FY21 as provisions declined and other income rose. The bank had reported a net loss at ₹342.08 crore during corresponding quarter previous year.

The bank’s net interest income – difference between interest earned and interested expended – grew 9.61% year-on-year (y-o-y) to ₹1,412.32 crore for the quarter ended 30 June over ₹1,288.46 crore in the same quarter last year.

The bank's other income, which includes core fee income, rose 39.05% y-o-y to ₹931.79 crore during the quarter under review. Its total provisions fell 16.26% during the June quarter to ₹969.52 crore against ₹1,157.82 crore in the corresponding quarter last year.

Indian Overseas Bank’s asset quality improved in the June quarter with gross bad loan ratio -- percentage of bad loans to total advances -- falling 863 basis points (bps) y-o-y to 13.9%. Its net non-performing asset (NPA) ratio was down 594 bps on a y-o-y basis to 5.1% in Q1 FY21.

The bank’s total advances were at ₹1.19 trillion in Q1 of FY21, a decrease of 6.97% over the same period last year. Total deposits stood at ₹2.26 trillion, an increase of 1.98% over 30 June last year.

On Thursday, shares of the bank gained 3.63% to close at ₹11.43, while the benchmark Sensex index lost 1.02% to close at 38,220.39 points.