Indian Overseas Bank (IOB) has maintained robust growth in FY24, achieving record net profit for both the March 2024 quarter and the full year, aided by higher income and lower provisions. The bank’s asset quality also improved, with fewer slippages and higher recovery of non-performing assets (NPAs).

The Chennai-headquartered public sector lender has received the board’s approval to raise capital of ₹5,000 crore in 3-4 tranches.

“Over the past 6-8 quarters, IOB has recorded consistently strong performance across all critical parameters without any fluctuations. There is now complete stability, and the bank aims to further enhance its performance in the upcoming quarters,” said Ajay Kumar Srivastava, MD & CEO of Indian Overseas Bank.

For the quarter ended March 31, 2024, IOB reported a 24 per cent increase in net profit to ₹808 crore, the highest-ever quarterly profit, when compared with ₹650 crore in the same quarter last year. Operating profit rose to ₹1,961 crore from ₹1,882 crore year-over-year.

Interest income increased by 28 per cent to ₹6,629 crore (from ₹5,192 crore in Q4 of FY23), and non-interest income surged by 73 per cent to ₹2,477 crore (from ₹1,430 crore). Net interest income grew by 21 per cent to ₹2,763 crore (from ₹2,276 crore), with a net interest margin of 3.53 per cent.

In the March 2024 quarter, the gross NPA ratio declined to 3.10 per cent (₹6,794 crore) from 7.44 per cent (₹14,072 crore) in the same quarter last year and 3.90 per cent (₹8,441 crore) in the December 2023 quarter. The net NPA ratio remained below 1 per cent at 0.57 per cent, down from 1.83 per cent in the March 2023 quarter and 0.62 per cent in Q3FY24.

For the full year ended March 31, 2024, IOB’s net profit grew by 26.5 per cent to ₹2,656 crore, the highest ever annual net profit, when compared with ₹2,099 crore in FY23. Net interest income increased by 19 per cent to ₹9,829 crore in FY24 (from ₹8,256 crore in FY23), driven by strong credit growth and non-interest income.

Gross advances increased by 16 per cent to ₹219,018 crore as of March 31, 2024, from ₹189,009 crore a year ago. Total deposits grew by 10 per cent to ₹285,905 crore (from ₹260,883 crore). The CASA ratio improved to 43.9 per cent as of March 31, 2024, compared to 43.74 per cent a year ago.

Srivastava mentioned that the bank has continued to reduce slippages and recover more from NPA accounts. Slippages decreased significantly to ₹1,516 crore as of March 2024 from ₹4,029 crore as of March 2023, while total recovery stood at ₹4,549 crore (₹4,285 crore a year ago). He added, “For FY25, we have set an ambitious target of recovering ₹5,500-6,000 crore.”

IOB plans to open around 100 new branches across India in FY25, with approximately 300 new hires expected to join the bank this year. Over the past three years, the bank has recruited about 1,400 employees for various roles.