IOB Q1 Results: Net profit rises 20% to Rs 392 crore

State-owned reported a 20% rise in net profit at Rs 392 crore for the June quarter against Rs 327 crore in the year ago period, riding on a sharp dip in provisioning requirements.

Its net interest margin (NIM), a key profitability parameter, improved to 2.53% in the quarter.

"We will target to boost NIM to 2.6% by the end of year," managing director Partha Pratim Sengupta said, adding that recovery from stressed assets would be key to improve the ratio.

The bank's operating profit for the quarter was lower at Rs 1026 crore against Rs l202 crore, due to mark to market provision of Rs 340 crore on investment, Sengupta said.


Total provisions were lower at Rs 630 crore against Rs 868 crores in the year ago period primarily because of lower bad loan provisions in line with the improvement in asset quality.

Gross non-performing assets ratio for the bank stood at 9% as against 11.48% a year back. It managed to reduce NPA by Rs 1000 crore riding on recovery. Net NPA ratio improved to 2.43% as compared with 3.15% over the same period.

The bank's provision coverage ratio was at 91.86%.

Its gross advances rose 17.7% year-on-year to Rs 1.64 lakh crore. Sengupta said that the bank is looking to raise Rs 1000 crore in qualified institutional placement to sustain growth and will soon begin discussions with investors.