Indian Overseas Bank reported a 58% jump in after-tax profit for the March quarter.

Chennai-based Indian Overseas Bank (IOB) has increased its post-tax profit (PAT) by 58% to Rs 552 crore for the quarter ended March 2022. Operating profit stood at Rs 1,614 crore in Q4FY22 as against Rs 1,724 crore in the previous period. Q4FY22 had a net interest margin of 2.41% compared to 2.39% in the December 2021 quarter.

The bank stood at Rs 1,55,801 crore with 12% annual growth as against Rs 1,39,597 crore a year ago.

Perth Pratim Sengupta, MD and CEO of Indian Overseas Bank, said in a press conference that the bank is expected to continue its growth trajectory even after the interest rate cycle is reversed with the help of a well-diversified loan portfolio.

Sengupta said the demand for retail loans will continue as lenders have sufficient liquidity in the banking system so far after the lenders release their results. The liquidity situation is subject to future action by the Reserve Bank of India, he warned. In addition, wage increases in some sectors of the economy could lead to higher demand for retail and home loans, he said.

Lenders expect 25% growth in its bottom line which leads to strong debt growth and improved asset quality. In the post-Kovid period, there has been a good revival in the MSME sector, Sengupta said, which will help the bank maintain its 12% credit growth.

While lenders are not saying no to corporate debt, it has diversified its portfolio and maintained a cautious approach to corporate debt.

In terms of asset quality, Indian Overseas Bank’s gross non-performance asset ratio improved to 9.82% in March 2022 from 10.40% and 11.69% a year ago. Its net NPA ratio has risen slightly from 2.65% in March 2022 to 2.63% and a slight increase from 3.58% a year ago. The Provision Coverage Ratio (PCR) has been raised from 90.34% on March 21 to 91.66% on March 22.

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