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Indian Overseas Bank

BSE: 532388 | NSE: IOB |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE565A01014 | SECTOR: Banks - Public Sector

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BSE Live

Feb 28, 12:10
8.65 -0.08 (-0.92%)
Volume
AVERAGE VOLUME
5-Day
89,764
10-Day
100,149
30-Day
107,256
66,719
  • Prev. Close

    8.73

  • Open Price

    8.53

  • Bid Price (Qty.)

    8.61 (1080)

  • Offer Price (Qty.)

    8.66 (68)

NSE Live

Feb 28, 12:18
8.60 -0.15 (-1.71%)
Volume
AVERAGE VOLUME
5-Day
1,389,687
10-Day
1,235,670
30-Day
1,309,497
586,742
  • Prev. Close

    8.75

  • Open Price

    8.70

  • Bid Price (Qty.)

    8.60 (51270)

  • Offer Price (Qty.)

    8.65 (23496)

Annual Report

For Year :
2019 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

Dear Members, The Board of Directors has pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2015. Global Business Performance The Bank has improved its Business Mix quite significantly in the last few years which has formed a strong base for future prospects. The business level of the Bank has reached Rs. 4,25,090 crores by March 2015 as against Rs. 4,09,051 crores in March 2014 with Balance sheet total size comprising of all assets mainly including Advances and Investments to the tune of Rs. 2,85,637 crores during the year. The Bank has larger scope in improving the potential with wide spread 3381 branches in all the states of the country. The Bank has decided to migrate to a new CBS model and be aligned with a common platform as being widely used in other PSBs. The technological advancement will work as a morale booster for the Bank to effectively deliver and enhance the customer service. This is a remarkable & significant task which the Bank has scheduled to achieve in a phased manner. The year 2014-15 has been more challenging for the Bank as a whole. There was a sluggish growth in the credit front. Accordingly, the Bank''s total deposits increased from Rs. 2,27,976 crores in March 2014 to Rs. 2,46,049 crores in March 2015 with a moderate growth of 8%. The global advances stood at Rs. 1,79,041 crores as of 31st March 2015. The domestic advances increased marginally from Rs. 1,61,992 crores in March 2014 to Rs. 1,62,838 crores in March 2015. Financial Performance The global operating profit has stood at Rs. 3,322 crores in 2014-15 compared to Rs. 3,997 crores in 2013-14 mainly due to constraints on interest spread during this financial year. However, the performance of the Bank in Q4 is significant resulting into a positive turnaround by achieving a net profit of Rs. 35.5 crores as against off-putting results in the preceding two quarters. As the Bank has to make bottom line provisions to the tune of Rs. 3,777 crores constituting 113% of total operating profit. However, the net loss for the whole year 2014-15 has come down to Rs. 454 crores as against Rs. 490 crores for the period April-December 2014. Income and Expenditure Analysis The year 2014-15 has been more challenging as far as the Bank''s profitability is concerned. Despite the constraints on interest spread the Bank has made a successful turnaround during the fourth quarter 2014-15 registering a net profit of Rs. 35 crores in Q4. This is made possible mainly on account of larger recoveries, containment of operating expenses, more control on funding costs apart from substantial treasury gains mainly in the fourth Quarter. The Bank has taken serious measures in controlling the cost of domestic deposits to 7.68% in Q4 as against 7.93% in Q1,7.94% in Q2 and 7.81% in Q3 during the year. However, the overall domestic cost of deposits ended with 7.84% for FY 2014-15 compared to 7.81% in 2013-14. The Bank has been maintaining the card rates on term deposits in line with the market trend. As RBI reduced the repo rates favorably by overall 50 basis points in the second half of the financial year to the present level of 7.50%, the Bank is able to reduce Its domestic cost of borrowings marginally to 9.64% for the year as a whole as against 9.65% in 2013-14. As such, the domestic cost of funds ended favorably at 7.92% for the full year 2014-15 compared to 8.03% in Q1,8.02% in Q2, 7.88% in Q3 and 7.73% in Q4. This can be attributed to efficient ALM techniques which resulted in substantial growth in Bank''s average retail term deposits apart from reducing average bulk deposits excluding high cost deposits. Although, the Bank has opened around 52 lacs CASA accounts during the year under review, the quantum of CASA deposit would stimulate only over a period. As such, domestic average CASA% was marginally lower at 23.71% compared to last year level of 24.25%, in line with the market trend. Due to higher incremental NPAs during the year, the yield on domestic advances has come down to 10.62% as against 10.95% in last year. Despite volatile market conditions, the yield on investments was maintained at 7.38% for the whole year 2014-15 compared to 7.39% in 2013-14. This has a major impact on Net Interest Income affecting the profitability. However, the Bank has been able to maintain the global Net interest margin reasonably at 2.06% in 2014-15. Also the Bank has maintained a comfortable Provision Coverage Ratio of 50.92% in March 2015. Capital Adequacy Ratio The Bank''s Capital Adequacy Ratio as on 31st March 2015 has stood at 10.11% as per Basel III norms. The Bank has issued Unsecured, Non Convertible, Additional Tier I, Basel III Compliant Perpetual Bonds to the extent of Rs. 1,000 crores including the green shoe option of Rs. 300 crores to augment additional Tier-I capital and overall capital of the Bank. The entire issue was fully subscribed by the investors. Branch Network During the year under review, the Bank has opened 116 branches across the country. Out of these, 86 branches (74.14%) are located in Rural and Semi Urban centres, of which 28 branches are located in Unbanked Rural Centres. These new branches have enabled the Bank to enhance new relationship and spread Bank''s Network covering all states. Further, the Bank has opened 8 Rapid Retail Centres, one City Back office and one extension counter during the year. As on 31st March 2015, the Bank has 3,381 domestic branches, as against 3,265 branches as on 31st March 2014, comprising of 1028 rural branches (30.41%), 947 Semi Urban branches (28.00%), 747 Urban branches (22.09%) and 659 Metropolitan branches (19.49%). Besides, the Bank has 7 Zonal Offices, 59 Regional Offices, 4 Extension Counters, 20 Satellite Offices, 40 City Back Offices, 41 Rapid Retail centers (RLPCs), 18 MSME Processing Centres and 6 Inspectorates. Corporate Governance Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank lays emphasis on the need for ensuring that structures and processes are put in place to help in compliance of its government responsibilities. During the year, SEBI has decided to review the provisions of the Listing Agreement with the objectives to adopt best practices on corporate governance and to make the corporate governance framework more effective. Clause 35B and Clause 49 of the Listing agreements are the main clauses amended. As per Clause 35B, the issuer agrees to provide E-voting facility to its shareholders in respect of all shareholders resolutions, to be passed at AGM/ EGM. Bank is in preparedness to provide e-voting facility to its shareholders at the time of AGM/EGM. In compliance to the amendments of Clause 49 of the Listing Agreement, the code of conduct has been put in place by the Bank which is applicable to all members of the Board and the Senior Management (i.e upto General Managers of the Bank). The Bank is also submitting a quarterly compliance report on Corporate Governance to The Audit Committee of the Board and to Stock Exchanges. Ministry of Corporate Affairs (MCA), Government of India has amended the Investor Education and Protection Fund (IEPF) Rules and advised the Bank the process of transfer of unpaid dividend amount to the Central Government. Accordingly, Unpaid Dividend amount pertaining to the years from 2000-01 to 2006-07 has been transferred to IEPF by the Bank and complied with the Government of India guidelines. The unpaid Dividend data pertaining to the years 2007-08 to 2013-14 is ported in MCA website and also available at www.iob.in. Bank is complying with all guidelines/regulations laid down by Regulatory authorities and Government of India. Bank regularly redresses the shareholders grievances without any time delay. Vision-Mission: 2013-2020 With the changing dynamics in the competitive environment, the Bank has reviewed its medium term Vision-Mission outlook for the period 2013 - 2020. The Bank has convened an exclusive meeting of the Board of Directors to discuss the Strategic Business Plan for the next year 2015-16 covering all the key aspects. Frame work analysis has been laid down in terms of growth in business, capital and profitability in the years to come. The Bank expects that the targets be well achieved with the support of migration to new CBS. Board of Directors Shri. M. Narendra, Chairman and Managing Director retired on superannuation on 31st July 2014 followed by Shri. A.D.M. Chavali, Executive Director on 31st October 2014. Shri. Niranjan Kumar Agarwal, Director (nominated under Section 9 (3) (g) - Chartered Accountant Category) had completed his 3 year term on 31st October 2014 and ceased to be Director. Shri. Ajit Vasant Sardesai and Prof. S. Sadagopan, Shareholder Directors had completed their 3 year term on 7th December 2014 and ceased to be Directors. Shri. Niranjan Kumar Agarwal and Shri. Sanjay Rungta have been elected as Shareholder Directors for a period of 3 years from 8th December 2014 to 7th December 2017. Shri. R. Koteeswaran has been appointed as Managing Director and Chief Executive Officer of the Bank from 31st December 2014 to 30th June 2016. Shri. Pawan Kumar Bajaj has been appointed as Executive Director from 10th March 2015 to 30th September 2018. The Board of Directors places on record their appreciation for the valuable contributions made by the erstwhile Directors and welcomes the new Directors. Acknowledgement The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks to the valued Customers, Employees Union, Officers Association, domestic and international banking group, the shareholders & other stake holders for their valued support, continued patronage with the Bank. The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bank''s Staff at all levels and look forward to their continued involvement with commitment towards achieving the future goals. For and on behalf of the Board of Directors Chennai (R. KOTEESWARAN) May 8, 2015 Managing Director & Chief Executive Officer

Director’s Report