Indian Overseas Bank Q4 Results: Lower provisions aid profit; To raise up to ₹5,000 crore in FY26

Indian Overseas Bank, the state-run lender, reported March quarter results on Friday, May 2, where its net profit, as well as its core income, increased on a year-on-year basis.

The lender's net profit increased by 30% from the same quarter last year to ₹1,051 crore, while its Net Interest Income (NII) grew by 13% on a year-on-year basis to ₹3,123 crore.

Lower provisions on a sequential basis contributed to the jump in profitability. Provisions for non-performing assets stood at ₹200 crore during the March quarter, compared to ₹400 crore in the December quarter.

Asset quality for the bank also improved on a quarter-on-quarter basis to 2.14% from 2.55% in December, while Net NPA stood at 0.37% from 0.42% during the previous quarter.

Return on Assets stood at 1.12% at the end of the quarter from 0.94% during the same quarter last year.

Additionally, the board has approved raising equity share capital to the tune of ₹4,000 crore through a follow-on public offer (FPO), rights issue, a Qualified Institutional Placement (QIP) or a preferential issue or any other mode in one or more tranches. This is subject to shareholder approval during its AGM or an Extraordinary General Meeting (EGM).

Indian Overseas Bank will also raise up to ₹1,000 crore through Basel-III compliant Tier-II bonds depending upon the requirement, with or without a greenshoe option during the financial year.

Indian Overseas Bank had recently raised ₹1,436 crore through a Qualified Institutional Placement (QIP). The lender is yet to update the change in shareholding post the QIP exercise.

Shares of Indian Overseas Bank (IOB) are trading 1% higher at ₹37.89. The stock has remained unchanged over the last one month.