Indian Overseas Bank plans to raise Rs 1,000 cr via QIP to
State-run Indian Overseas Bank (IOB) has said that it will be raising around Rs 1,000 crore through qualified institutional placements (QIP) to sustain business growth.
The bank has posted a 20 per cent rise in net profit for the first quarter of the current financial year to Rs 392 crore, compared with Rs 327 crore in the April-June quarter of 2021-22, owing to a dip in bad loans.
“The bank board has already decided to raise around Rs 1,000 crore under CET (common equity tier). I think this will make our position comfortable for the next one-and-a-half years,” said Partha Pratim Sengupta, managing director and chief executive officer, IOB. He added that the money will be raised to sustain the business growth. “We are planning a QIP now. We have decided that we should not be much aggressive on any segment, so the growth will be focused on all segments – RAM and corporate,” he said.
During the quarter under review, the bank’s total income dipped to Rs 5,028 crore as against Rs 5,607 crore during the April to June quarter of 2021-22. In the April-June quarter of 2022-23, the bank’s gross non-performing assets (NPA) reduced to Rs 14,769 crore with a ratio of 9.03 per cent as against Rs 15,952 crore with a ratio of 11.48 per cent during the same quarter last fiscal.
Net NPA as of June 30 reduced to Rs 3,698 crore with a ratio of 2.43 per cent as against Rs 3,998 crore with a ratio of 3.15 per cent during the same quarter last fiscal. The provision for bad loans during the quarter under review dipped to Rs 132.73 crore as against Rs 1,010.15 during the same period a year ago.
The Chennai-based bank’s Provision Coverage Ratio improved to 91.86 per cent as on June 2022, as against 91.56 per cent in June 2021. Operating Profit for Quarter ended June 30 is decreased to Rs 1,026crore compared to Rs 1,202 crore during the same quarter last fiscal, due to marked to market provision of Rs 340.16 crore on investments
During the quarter, the interest income stood at Rs 4,435 crore as against Rs 4,063 crore for the quarter ended June 2021. The bank’s net interest margin also moved up to 2.53 per cent as against 2.34 per cent during the April to June quarter in 2021-22.