Moneycontrol Bureau
Public sector lender Indian Overseas Bank's fourth quarter profit fell 86.8 percent year-on-year to Rs 35.5 crore compared to Rs 268.3 crore in the year-ago period. More importantly the bank managed to turn profitable during the quarter compared to loss of Rs 516 crore in December quarter 2014 (sequentially) and loss of Rs 245.5 crore in September quarter 2014.
Lower net interest income and operating profit impacted profits but higher other income and lower provisions aided profits.
Net interest income, the difference between interest earned and interest expended, slipped 11 percent to Rs 1,255.8 crore during January-March quarter from Rs 1,410.7 crore in the corresponding quarter of last fiscal.
Other income (non-interest income) jumped 32 percent year-on-year to Rs Rs 794.3 crore while operating profit fell 0.9 percent to Rs 1,180.2 crore in the quarter gone by.
Provisions for bad loans slipped 18.1 percent on yearly basis (down 16.1 percent sequentially) to Rs 986.2 crore during January-March quarter with provision coverage ratio at 50.92 percent as on March 2015.
During the quarter, the public sector lender has utilised a sum of Rs 150 crore from floating provisions/counter cyclical provisioning buffer towards specific provision for non-performing assets (against Rs 324.20 crore utilised in year-ago quarter).
Asset quality was still elevated but maintained by the bank. Gross non-performing assets (NPA) increased by 335 basis points year-on-year (up 21 bps Q-o-Q) and net NPA rose 248 bps Y-o-Y (up 16 bps Q-o-Q) to 5.68 percent in the quarter gone by.
The scrip of Indian Overseas Bank closed at Rs 40.55, down Rs 0.65, or 1.58 percent on the BSE.
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