Sunday, January 29, 2012

Sharp dip in Q3 profit of Indian Overseas Bank

CHENNAI, January 29, 2012

Indian Overseas Bank (IOB) reported a good growth in income from operations in the third quarter ended December 31, 2011, at Rs. 5,015.33 crore against Rs. 3,452.86 crore in the same period previous year with significant contributions from corporate and retail banking.



The net profit after taxation, however, has dropped sharply to Rs. 108.27 crore from Rs. 231.65 crore due to increased provisions towards restructured accounts and provisions for depreciation on investments.



Addressing presspersons here on Saturday, M. Narendra, Chairman and Managing Director, said the restructured accounts related to telecom, power distribution, infrastructure and trading sectors.



There was also interest reversal to the tune of Rs. 75 crore, he said. The net non-performing assets as on December 31, 2011 stood at Rs. 1,600 crore. In percentage terms, it has improved to 1.23 per cent from 1.51 per cent in the year-ago period, Mr. Narendra said. IOB was ahead of the banking system in respect of business growth with a 33 per cent rise year-on-year at Rs. 2,99.555 crore as on December 31, 2011 against Rs. 2,25,191 crore in the year-ago period, he said. While deposits went up by 34 per cent to Rs. 1,67,006 crore from Rs. 1,25,062 crore, gross advances registered a rise of 32.4 per cent to Rs. 1,32,549 crore from Rs. 1,00,129 crore.



Despite a moderate increase of 13 per cent in CASA (current account savings account), its share in total deposits declined by 4.82 per cent to 26.15 per cent. This was mainly due to accelerated growth in term deposits in the rising interest rate scenario, Mr. Narendra said.



With new branches contributing significantly to CASA, the bank was hopeful of registering a rise of 22 per cent in CASA, Mr. Narendra said.



While interest income for the third quarter rose by 48 per cent to Rs. 4,604 crore from Rs. 3,102 crore, non-interest income registered a rise of 17.1 per cent to Rs,. 411 crore from Rs. 351 crore.



The bank\'s capital adequacy ratio stood at 10.89 per cent under Basel-I norms and 11.84 per cent under Basel-II norms.



The bank was expecting capital infusion from the Government to the tune of Rs. 1,450 crore which would result in a rise in capital adequacy ratio under Tier-1 to 8 per cent from 6.68 per cent at present, Mr. Narendra said.


News From: http://www.7StarNews.com

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