𝘐𝘯𝘥𝘪𝘢𝘯 𝘖𝘷𝘦𝘳𝘴𝘦𝘢𝘴 𝘉𝘢𝘯𝘬 𝘘3𝘍𝘠25 𝘍𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘳𝘦𝘴𝘶𝘭𝘵𝘴: 𝘕𝘦𝘵 𝘗𝘳𝘰𝘧𝘪𝘵 𝘙𝘪𝘴𝘦𝘴 21% 𝘛𝘰 𝘙𝘴 874 𝘊𝘳𝘰𝘳𝘦
Chennai, January 20, 2025: Indian Overseas Bank Managing director and CEO Ajay Kumar Srivastava today announced Bank's Q3FY25 Financial results. During the press interaction, he said that the bank reported a 21% year-on-year rise in its net profit to ₹874 crore for the third quarter, driven by a strong growth in interest income. Total income rose 13% to ₹8,409 crore, with interest income increasing 15% to ₹7,112 crore.
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| (In Center) Ajay Kumar Srivastava, Managing director and CEO, Indian Overseas Bank |
Total business grew 10% to ₹5.43 lakh crore during the quarter under review. Advances rose 10% to ₹2.38 lakh crore while total deposits also increased 10% to ₹3.05 lakh crore. However, deposits saw a sequential decline from ₹3.11 lakh crore in the July-September quarter.
Ajay Kumar Srivastava attributed the sequential drop in deposits to the maturity of high-cost bulk deposits. He said IOB chose to prioritise low-cost CASA deposits over bulk deposits, which accounted for only ₹16,000 crore, or 4%, of total deposits during the latest quarter. The bank’s cost of funds jumped to 5.24% from 5.02% in the year-ago period. We are aggressively focusing on onboarding CASA customers. Over the last 21 months, we have onboarded 52 lakh new CASA customers, resulting in ₹17,000 crore of fresh CASA business,” he added at the earnings press conference. The share of CASA in total deposits remained stable at 43%. The cost of deposits moderated from 5.15% in Q2FY25 to 5.08% in Q3FY25.
On the advances side, the share of retail, agriculture, and MSME (RAM) in domestic lending increased to 78% in Q3FY25 from 69% in the same quarter last year. The share of corporate advances fell to 22% from 31% in Q3FY24. Srivastava said the bank had let go of 3-4 large corporate loan accounts worth ₹2,500-3,000 crore each, post maturity, due to unsatisfactory interest rates. The RAM and corporate loan ratio currently stands at 77:23. The bank plans to increase the corporate loan share to 30%.
The asset quality showed a significant improvement, with gross non-performing assets (NPA) as a percentage of gross advances reducing to 2.55% as of December 2024 from 3.90% a year earlier. Net NPA improved to 0.42% from 0.62%.
Recoveries stood at ₹956 crore, compared with ₹1,041 crore in the previous quarter. Srivastava said Q2FY25 recoveries were unusually high due to significant recoveries from technical write-offs and two large accounts through the NCLT. The bank has set a recovery target of ₹5,500 crore for FY25 and has achieved ₹3,021 crore so far. “We are confident of recovering more than ₹2,500 crore in the final quarter.
On fundraising plans, Srivastava said the bank has approval to raise ₹2,000 crore through a qualified institutional placement, and is planning to raise the amount that during the current quarter. The QIP is expected to reduce the government’s stake in IOB, currently over 96%, by 2-2.5%.
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