Shares of
Indian Overseas Bank Ltd (IOB) gained after the bank reported Profit after tax (PAT) for the Jun-21 quarter was higher by 171% at Rs327cr due to higher other income and lower provisioning, which fell by more than 11% to Rs868cr.
NIMs were flat to marginally lower at 2.34% while the CASA ratio was marginally higher at 41.63% in the Jun-21 quarter. Cost to income ratio was also stable at around 53.57%.
The stock is currently trading at Rs23.50 up by Rs0.15 or 0.64% from its previous closing of Rs23.35 on the BSE. The scrip opened at Rs23.50 and has touched a high and low of Rs23.95 and Rs23.30 respectively.
The bank posted a marginal 1.50% fall in total consolidated revenues in the Jun-21 quarter at Rs5,155cr, but revenues were 15.13% lower on sequential basis compared to Mar-21 quarter due to sharply lower other income component. On yoy basis, the lower interest and investment income were offset by higher other income.
On a yoy basis, the revenues from corporate treasury were sharply lower while the revenues from retail banking were flat to marginally higher. However, the income from corporate banking showed a growth on yoy basis. The bank expects to come out of the prompt correction action shortly, after which it can expand its loan books.
Gross NPAs at 11.48%, was sharply lower in yoy terms, but absolute NPAs are still quite high. This should temper once the bank comes out of PCA and is able to build its asset book. The ROA at 0.46% is fairly attractive while the capital adequacy is comfortable at above 15% although expansion of loan book from these levels will require additional capital buffers.