The Hindu Business Line : IOB expects to grow 20% this year

Chennai, July 5 Indian Overseas Bank expects to grow by 20 per cent during the current financial year to surpass a total business volume of Rs 2 lakh crore, provided the monsoons are on time and are adequate.

To a shareholder’s query on the bank’s growth expectations in 2009-10, during the 9th Annual General Meeting, Mr S.A. Bhat, Chairman and Managing Director, said that the bank would be growing by 20 per cent both in deposits and advances. However, if the monsoons are below the expected level, which would affect the economy’s growth, the bank’s business growth may also be impacted, he said.

Another shareholder wanted to know if the bank’s operating profits were impacted by the Government’s Agriculture Debt Waiver and Debt Relief Scheme 2008 given to small and marginal farmers. Mr Bhat said that the programme did not have much impact on its operating profits since the bank has received the first instalment of Rs 235.5 crore from the Reserve Bank of India out of the total amount eligible for debt waiver of Rs 580 crore.

Reducing bad debts

Most queries revolved around the bank’s means to curtail and reduce the build-up of bad debts. According to IOB’s annual report, the bank had added gross non-performing assets worth about Rs 2,261 crore in 2008-09 compared with Rs 665 crore the previous year. The bank had also reduced about Rs 1,334 crore of these bad loans during the year. It had built bad debts of about Rs 996 crore from the previous year and therefore had total gross NPA of Rs 1,923 crore as on March 31, 2009.