Net profits of Indian Overseas Bank have tripled to Rs 434 crore for the fourth quarter ending March 31, 2011, from Rs 127 crore for the same period the previous year.

Addressing a press conference here on Monday, Mr M. Narendra, Chairman and Managing Director, Indian Overseas Bank, said the bank's board of directors has recommended dividend of Rs 5 a share (50 per cent).

For the full year 2010-11, the bank made a net profit of Rs 1,072 crore, 52 per cent higher than the Rs 707 crore for 2009-10. In this, the bank was aided by recoveries of Rs 193 crore from bad loans previously written off.

It recovered another Rs 130 crore from non-performing accounts in respect of which it had stopped debiting interest.

Bad loans continue to be a problem, but less so. Last year, the fresh build up of bad loans amounted to Rs 2,169 crore, compared with Rs 3,127 crore in the previous year. However, the bank's officials pointed out that most of the loans are backed by collateral security and, hence, there would be no problem in recovering the loans. In fact, most of the delinquencies are purely technical, or classified as NPAs as per norms, and but will be paid back.

IOB share's on Monday had gained 5.47 per cent to end at Rs 161 a share on the Bombay Stock Exchange.

To raise more funds

Mr Narendra said that the liquidity position was comfortable. The bank recently raised debt of $ 500 million through an issue of ‘medium term notes' (MTN). It is mulling options of raising another $300 m in the current year. These funds will be utilised for lending abroad—mostly to Indian customers in other countries.

Today, the bank also announced a new customer service — a mobile-phone based grievance redress mechanism.

IOB also launced another service today that enables two customers of the bank to transfer funds to one another using their mobile phone.

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