Asset quality and NIMs have improved this quarter: IOB

Asset quality of public sector lender Indian Overseas Bank has improved in this quarter, says chairman and managing director M Narendra.

Speaking to CNBC-TV18 about the financial performance of the bank, he said, “Last quarter we had Rs 1,668 crore of NPA incrementally and in this quarter it is less than Rs 1,100 crore.”

Further, the bank’s net interest margin (NIM) on the domestic front has improved from 2.30 percent to more than 2.48 percent. Globally, NIMs stood at 2.39 percent in this quarter compared to 2.24 percent in last quarter, he added.

Also Read: ICICI Bank Q2 net up 20%, asset quality improves, NIM rises 

Below is the edited transcript of M Narendra’s interview with CNBC-TV18

Q: Can you first just take us though how asset quality did this quarter. There was fair bit of worsening on your gross non performing assets?

A: Our asset quality this quarter is much better. Last quarter we had Rs 1,668 crore of NPA incrementally and in this quarter it is less than Rs 1,100 crore.  The cash recovery from those accounts other than the return of account in this quarter has been Rs 222.36 crore as against the last quarter of Rs 198.58 crore.

Upgradation has been Rs 302 crore as against Rs 92.08 crore in the last quarter. Last quarter it was Rs 553.63 crore and this quarter it is hardly Rs 14.42 crore. We have done enough provisions. The net NPA has moved only from 2.81 to 2.83

Q: Could you tell us what were your NIMs for the current quarter?

A: The domestic NIM has been more than 2.48 percent, so from a very low level of 2.30 percent, it has is improved. Globally also we are having more than 2.39 percent in this quarter compared to 2.24 percent in last quarter. There has been good interest income advances growth in this quarter. It has been more than 21.90 percent compared to 6.17 percent increase in the interest rate on deposit.

We have moderated liability management. We have focused on CASA improvement. In fact, we use mainly CASA in savings and current and we have very good growth there, it is around 14 percent and that has resulted in good improvement in net interest margin.

Q: Can you just give us what your consolidated net interest margin was – you did 2.24 percent in the previous quarter on a blended basis what was it?

A: The combined effect of the net interest margin for the bank globally is now 2.39 percent, it was 2.24 percent in the last quarter.