Indian Overseas Bank (IOB) has registered double-digit growth in its net profit for the March quarter and also for the fiscal FY23, helped by strong growth in net Interest income and improvement in asset quality.

The board approved the Chennai-headquartered bank’s plan to raise capital to the tune of ₹2,000 crore.

For the quarter that ended March 31, 2023, IOB’s net profit rose 18 per cent at ₹650 crore when compared with ₹552 crore in the year-ago quarter.

The bank’s operating profit was higher at ₹1882 crore (₹1614 crore) supported by higher income.

Total income stood at ₹6622 crore (₹5719 crore). Interest income grew 18 per cent to ₹5192 crore (₹4215 crore). The net interest margin stood at 3.20 per cent (2.41 per cent).

For the March 2023 quarter, the gross NPA ratio fell to 7.44 per cent (₹14,072 crore) from 9.82 per cent (₹15,299 crore) in the year-ago quarter and 8.19 per cent (₹14,333 crore) in the preceding quarter.

Net NPA dropped below 2 per cent and stood at 1.83 per cent (₹3,266 crore) when compared with 2.65 per cent (₹3,825 crore) in Q4 of FY22 and 2.43 per cent in the preceding quarter.

For the full year ended March 31, 2023, the bank’s net profit grew 23 per cent at ₹2,099 crore when compared with ₹1,710 crore in FY22. Its operating profit stood at .₹5,942 crore as against ₹5,763 crore.

Interest income was higher at Rs.19,400 crore (Rs.16,730 crore in FY22). Other income was lower at ₹4,109 crore (₹4903 crore).

Net Interest income grew 31 per cent to ₹8,256 crore in FY23 (₹6,311 crore in FY22), on the back of strong credit growth, according to a statement.

Gross advances grew 21 per cent to ₹1,89,009 crore as of March 31, 2023, from ₹1,55,801 crore a year ago. Total deposits increased to ₹2,60,883 crore (₹2,62,159 crore). The CASA ratio of the bank improved to 43.74 per cent as of March 31, 2023, as against 43.44 per cent a year ago.

Total provisions and contingencies were lower at ₹3,594 crore in FY23 as against ₹3,984 crore in FY21. NPA Provisions were also lower at ₹2858 crore (₹3401 crore).

The provision coverage ratio (PCR) improved to 92.63 per cent from 91.66 per cent as of March 31, 2022.

The bank has planned to raise paid-up equity share capital amounting to ₹1,000 crore by way of various options available. The bank is also planning to issue Basel III tier II bonds to a maximum extent of 1,000 crore.

IOB is planning to open 40 new branches across India under branch ramp up plan for 2023-24.