The Hindu Business Line : IOB net up at Rs 158 cr; to pay 14 pc interim

INDIAN Overseas Bank has reported a net profit of Rs 158.33 crore for the quarter ended September against Rs 154.62 crore in the corresponding quarter last year. The bank has declared an interim dividend of Rs 1.40 per share (14 per cent), the record date for which is November 16.

At a press conference here on Saturday, the IOB Chairman and Managing Director, Mr S.C. Gupta, said the higher net profit was achieved despite higher provisions for depreciation of value of investments (Rs 60.77 crore) and wage arrears (Rs 83 crore). Further, the bank earned a profit of Rs 83 crore when the Government bought back some of its securities.

Interest earned rose to Rs 982.28 crore compared to Rs 925.89 crore in the comparable quarter last year. On the other hand, `other income' slid to Rs 117.78 crore from Rs 205.65 crore, mainly due to lesser profits from treasury operations.

"Viewed against the backdrop of hardening of interest rates and reduced income from treasury operations, the performance is impressive," Mr Gupta said.

He said the bank's net NPAs had been brought down to 1.98 per cent of the risk-weighted assets from 2.85 per cent in March 2004.

Deposits grew 12 per cent over the last 12 months to Rs 43,499 crore; advances rose 21 per cent to Rs 24,002 crore.

During the quarter, the bank shifted securities worth Rs 2,096 crore from the `available for sale' category to `held for maturity', following RBI's guidelines on investments. Because of this, the bank had to provide Rs 60.77 crore for the loss in market value of the transferred securities.

Answering a question, Mr Gupta said the bank still had securities worth about Rs 12,000 crore under the `available for sale' head, which yielded on an average 7.6 per cent.

The bank also has an equity portfolio of about Rs 300 crore on which it made a profit of Rs 30 crore this year.

In the half-year ended September, IOB made a net profit of Rs 332.93 crore compared to Rs 293.40 crore in the same period last year.

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