From left: Joydeep Dutta Roy, Executive Director, Ajay Kumar Srivastava, MD & CEO, and T Dhanaraj, Executive Director of Indian Overseas Bank.
Indian Overseas Bank (IOB) sustained its strong performance in the March 2025 quarter, with quarterly net profit surpassing ₹1,000 crore for the first time, driven by improvemements across key metrics and continued improvement in asset quality, despite a major corporate account turning into an NPA (non-performing asset).
The Chennai-headquartered public sector lender has received the Board’s approval to raise equity capital of ₹4,000 crore and ₹1,000 crore in Tier II capital through the issuance of Basel III-compliant Tier II bonds in FY26.
IOB reported its highest-ever quarterly net profit of ₹1,051 crore for the March 2025 quarter, compared to ₹808 crore in the year-ago period, supported by a strong rise in operating profit on the back of robust interest income. For the full year FY25, net profit rose 25 per cent to ₹3,335 crore.
Operating profit grew by 33.5 per cent to ₹2,618 crore. Net interest income rose 13 per cent to ₹3,223 crore. Total slippages for the March quarter stood at ₹2,756 crore against ₹329 crore in the year-ago quarter. The higher slippage was mainly due to one large corporate account, MTNL, which was already classified as an NPA by several other banks. For IOB, it slipped during Q4 of FY25.
Corporate NPA account
“The bank is financially sound. Even with a big account like MTNL slipping into NPA (₹2,332 crore), we provided 100 per cent and still posted a net profit of ₹1,051 crore — a 30 per cent year-on-year growth. Gross NPA and net NPA ratios have come down. This reflects the bank’s internal strength and soundness,” said Ajay Kumar Srivastava, Managing Director and CEO of IOB.
The bank’s gross NPA ratio declined to 2.15 per cent in Q4 FY25 from 3.10 per cent a year ago, while net NPAs fell to 0.37 per cent from 0.57 per cent. The MTNL slippage was 100 per cent provided for in advance. So, despite this addition, the bank’s GNPA has actually decreased as there is no incremental provisioning required, he said.
Total recoveries during the quarter amounted to ₹992 crore, including ₹522 crore from technically written-off accounts, compared with ₹1,468 crore in Q4 FY24.
Total deposits grew by 9 per cent to ₹3,11,938 crore, with CASA ratio remaining around 43 per cent. Total term deposits grew about 10 per cent to ₹1,75,777 crore during the March 2025 quarter.
Gross advances were up 14 per cent to ₹2,50,019 crore as of March 31, 2025 — up from ₹2,19,018 crore in the year-ago quarter. Retail and agriculture loans grew by 29 per cent and 34 per cent, respectively, while MSME loans recorded a 7 per cent rise.
Presenting the outlook for the year, Srivastava said IOB would look to grow its business by around 13-14 per cent in FY26. “Credit growth is expected to be around 14-15 per cent, and we aim to match deposit growth at around 13 per cent. We are confident of maintaining ₹1,000+ crore quarterly profit levels going forward,” he added.
Published on May 2, 2025
