Capitaline

Results 02-Feb-22

Analysis

Indian Overseas Bank

Loan growth and asset quality improves

Indian Overseas Bank has posted 113% surge in the net profit to Rs 454.11 crore in the quarter ended December 2021 (Q3FY2022). Interest income has declined 1.08% to Rs 4197.69 crore. Interest expense fell 3.54% to Rs 2625.58 crore. Hence net interest income rose 3.31% to Rs 1572.11 crore.

With other income showing a decline of 23.13% to Rs 1185.93 crore, net total income fell 10.00% Rs 2758.04 crore. Operating expenses fell 7.69% to Rs 1230.65 crore. As a result, profit before provisions fell 11.78% to Rs 1527.39 crore. Provisions & Contingencies decreased 29.61% to Rs 1065.35 crore, leading to Profit before tax reported profit of Rs 462.04 crore compared to Profit of Rs 217.76 crore.

The cost to income ratio rose to 44.62% Q3FY2022 from 43.50% Q3FY2021.

Provision for tax was expense of Rs 7.93 crore, compared to Rs 4.89 crore. Net profit rose 113.33% to Rs 454.11 crore.

Asset quality improves

Gross non-performing assets declined to Rs 15426.55 crore end December 2021 from Rs 16753.48 crore end December 2020 and Rs 15665.69 crore end September 2021.

Gross NPA % declined to 10.40% end December 2021 from 12.19% end December 2021 and Rs 10.66% end September 2021.

Net non-performing assets fell to Rs 3586.83 crore end December 2021 from Rs 3904.92 crore end December 2020 and Rs 3741.21 crore end 30 September 2021.

Net NPA % declined to 2.63% end December 2021 from 3.13% end December 2020 and 2.77% end September 2021.

The provision coverage ratio improved to 92.33% end December 2021 as against 92.00% end September 2021.

Total cash recovery for December 2021 was Rs 1199.51 crore (includes Recovery from Tech write off of Rs 247.37 crore and sole to ARC of Rs 241 .46 crore and Security Receipts) as against Rs 831.77 crore (includes Recovery from Tech write off of Rs 428.61 crore) in September 2021

Capital adequacy ratio moved from 11.49% Q3FY2021 and 15.41% as on 30 September 2021 to 15.41% Q3FY2022.

Asset Quality Indicators: Indian Overseas Bank
	Dec-21	Sep-21	Jun-21	Mar-21	Dec-20	Variation
	Dec-21	Sep-21	Jun-21	Mar-21	Dec-20	QoQ	YTD	YoY
Gross NPA (Rs Crore)	15426.55	15665.69	15952.10	16323.18	16753.48	-2	-5	-8
Net NPA (Rs Crore)	3586.83	3741.21	3998.21	4577.59	3904.92	-4	-22	-8
% Gross NPA	10.40	10.66	11.48	11.69	12.19	-26	-129	-179
% Net NPA	2.63	2.77	3.15	3.58	3.13	-14	-95	-50
% Provision Coverage Ratio	92.33	92.00	91.56	90.34	91.91	33	199	42
% CRAR - Basel III	15.41	15.41	15.48	15.32	11.49	0	9	392
% CRAR - Tier I Basel III	12.94	12.84	12.96	12.91	8.82	10	3	412
Variation in basis points for figures given in percentages and in % for figures in Rs crore

Business highlights

Total business stood at Rs 492507 crore end December 2021 as against Rs 458276 crore end December 2020 with an increase of 7.47%.

Total deposits increased lo Rs 247118 crore end December 2021 as against Rs 234116 crore end December 2020, with an increase of 5.55%.

Gross Advances stood at Rs 148316 crore end December 2021 as against Rs 137469 crore end December 2020, with an increase of 7.89%.

The Bank has evolved o policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts. The Bank has also exited from accounts in the stressed sectors, wherever feasible.

CASA of the Bonk improved to 42.53% end December 2021 as against 40.93% end December 2020. Total CASA has increased from Rs 95830 crore end December 2020 to Rs 105105 crore end December 2021, with an increase of 9.68%.

Book value per share of the bank stood at Rs 10.6 per share at end December 2021. The adjusted book value accounting for NNPA and 25% of restructured loans stood at Rs 8.0 per share at end December 2021.

Financial Performance 9MFY2022

Indian Overseas Bank Interest income has declined 3.04% to Rs 12515.34 crore. Interest expense fell 7.12% to Rs 7813.74 crore. Hence net interest income rose 4.59% to Rs 4701.60 crore.

With other income showing a fall of 4.06% to Rs 3398.87 crore, net total income increased 0.78% Rs 8100.47 crore. Operating expenses rose 2.21% to Rs 3951.87 crore. As a result, profit before provisions fell 0.55% to Rs 4148.6 crore. Provisions & Contingencies decreased 19.20% to Rs 2969.73 crore, leading to Profit before tax reported profit of Rs 1178.87 crore compared to Profit of Rs 496.06 crore.

There were no extraordinary items. PBT after EO reported profit of Rs 1178.87 crore compared to Profit of Rs 496.06 crore. Provision for tax was expense of Rs 21.71 crore, compared to Rs 14.36 crore. Net profit rose 140.22% to Rs 1157.16 crore.

The cost to income ratio rose to 48.79% Q3FY2022 from 48.10% Q3FY2021.

Indian Overseas Bank: Financial Results
Particulars	2112 (3)	2012 (3)	Var %	2112 (9)	2012 (9)	Var %	2103 (12)	2003 (12)	Var %
Interest Earned	4197.69	4243.72	-1	12515.34	12908.10	-3	16965.53	17406.11	-3
Interest Expended	2625.58	2722.04	-4	7813.74	8412.80	-7	11067.03	12103.28	-9
Net Interest Income	1572.11	1521.68	3	4701.60	4495.30	5	5898.50	5302.83	11
Other Income	1185.93	1542.82	-23	3248.87	3392.65	-4	5409.02	3209.68	69
Net Total Income	2758.04	3064.50	-10	7950.47	7887.95	1	11307.52	8512.51	33
Operating Expenses	1230.65	1333.17	-8	3951.87	3866.26	2	5561.72	5128.83	8
Operating Profits	1527.39	1731.33	-12	3998.60	4021.69	-1	5745.80	3383.68	70
Provisions & Contingencies	1065.35	1513.57	-30	2819.73	3525.63	-20	4906.09	11728.16	-58
Profit Before Tax	462.04	217.76	112	1178.87	496.06	138	839.71	-8344.48	LP
Provision for Tax	7.93	4.89	62	21.71	14.36	51	8.24	182.92	-95
PAT	454.11	212.87	113	1157.16	481.70	140	831.47	-8527.40	LP
EPS*(Rs)	0.96	0.45		0.82	0.34		0.44	-4.51
* Annualized on current equity of Rs 18902.41 crore. Face Value: Rs 10, Figures in Rs crore,PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

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