IOB to hike FD interest rates by up to 60 bps from November 10

Indian Overseas Bank, one of the leading public sector lenders, said on Wednesday that commencing on November 10 it would raise the interest rates on its retail term deposits by up to 60 basis points. Domestic and non-resident depositors would benefit from a rise of up to 7.15 per cent thanks to the adjustment in interest rates on deposits with maturities of 444 days, three years, and higher. The interest rates for term deposits with terms of 270 days to one year and one year to three years were risen by 60 basis points, the bank stated in a statement.

Indian Overseas Bank (IOB) last raised the interest rates on retail fixed deposits of less than ₹2 Cr on October 10, 2022. In reaction to the modification, the bank hiked its interest rates by up to 35 basis points across a range of tenors. IOB is now providing fixed deposit interest rates for maturities ranging from 7 days to 10 years between the ranges of 3.60% and 5.85%. While 6.00% is currently the highest interest rate available on fixed deposits with 1000-day maturities. Super senior citizens (those who are 80 years of age or more) earn an additional rate of 0.75%, while senior citizens receive an additional rate of 0.50% at the Indian Overseas Bank (IOB).

In Q2FY23, the bank reported a net profit of ₹501 Cr compared to ₹392 Cr in Q1FY23 and ₹376 Cr in Q2FY22, representing a QoQ growth of 27.89% and a YoY growth of 33.34%. IOB reported an operating profit of ₹1494 Cr in Q2FY23, compared to ₹1026 Cr in Q1FY23 and ₹1419 Cr in Q2FY22, representing a QoQ growth of 45.63% and a YoY growth of 5.30%. The bank's net interest income climbed by 11.37% QoQ and 19.62% YoY from ₹1633 Cr in Q2FY22 and ₹1754 Cr in Q1FY23 and ₹1953 Cr in Q2FY23. The net interest margin stood at 2.79% in the quarter ended September 2022 from 2.53% in the quarter ended June 2022 and 2.51% in the quarter ended September 2021. 

IOB reported a gross NPA of ₹14726 Cr in Q2FY23 compared to ₹14919 Cr in Q1FY23 and ₹15666 Cr in Q2FY22, representing a QoQ fall of -1.29% and a YoY fall of -6.00%. The bank reported a net NPA of ₹4149 Cr in Q2FY23, compared to ₹3698 Cr in Q1FY23 and ₹3741 Cr in Q2FY22, representing a QoQ growth of 12.18% and a YoY growth of 10.89%. 

The gross NPA margin stood at 8.53% in Q2FY23 from 9.12% in Q1FY23 and 10.66% in Q2FY22 while the net NPA margin stood at 2.56% in Q2FY23 from 2.43% in Q1FY23 and 2.77% in Q2FY22. IOB reported a CASA of ₹111924 Cr in Q2FY23 compared to ₹112012 Cr in Q1FY23 and ₹106806 Cr in Q2FY22, representing a QoQ fall of -0.08% and a YoY rise of 4.79%.