Indian Overseas Bank has become the fifth public sector lender to surpass Rs 1 lakh crore in market capitalisation with its shares soaring over 22 percent. IOB joined the list of peers like India's largest lender State Bank of India, Bank of Baroda, Punjab National Bank and Union Bank of India.
The stock hit a fresh 14-year high of Rs 55.6 a share and, gained as much as 5 percent intraday, taking its market valuation to Rs 1.03 lakh crore on February 2. This was the fourth straight session for the stock to trade in green.
State Bank of India (SBI) leads the league with a market value of around Rs 5.8 lakh crore, followed by Bank of Baroda and Punjab National Bank at Rs 1.33 lakh crore for both, while for Union Bank of India, it is Rs 1.1 lakh crore.
Analysts suggest that public sector banks are well-equipped to handle the net interest margins, benefiting from excess liquidity and lower credit-deposit and liquidity coverage ratios. Since 2021, state-run banks have consistently outperformed their private peers.
IOB is looking to increase its advances by 13-14 percent in the next few quarters, said AK Srivastava, its managing director and chief executive officer. “We would like to grow our credit in double digits, maybe 13-14 percent.”
In an exclusive interaction with Moneycontrol, Srivastava said that the bank has a credit-deposit ratio of 78 percent and would like to maintain that range. IOB aims to raise the advances by 13-14 percent in the next few quarters, as Srivastava said. He expressed the desire to maintain a credit-deposit ratio of 78 percent. To secure inexpensive deposits, the bank plans to open 70-80 branches in the next financial year.
IOB reported a 30.3 percent on-year increase in net profit to Rs 723 crore and a 15.6 percent on-year rise in operating profit to Rs1,780 crore for Q3. The bank's net interest income (NII) grew 22 percent YoY to Rs6,176 crore in the October–December 2023 period. However, its net interest margin (NIM) saw a slight decline of 3.12 percent from 3.27 percent last year.
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