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IOB Profit Soars 56% on Strong Interest Income
26 Oct
Summary
- Net profit jumped 56% to ₹1,912 crore in Q2 FY27.
- Interest income grew 17% year-on-year, boosting net income.
- Credit growth outpaced deposit growth, rising 24.35%.
Indian Overseas Bank (IOB) announced a substantial 56% year-on-year net profit increase, reaching ₹1,912 crore in the second quarter of FY27. This performance was fueled by strong core interest income and reduced operating and tax expenses.
Core interest income for the state-run lender rose by 17% year-on-year, leading to a 26% increase in net interest income. The bank's domestic net interest margin improved to 3.49%. Credit growth accelerated by 24.35%, significantly exceeding deposit growth, with a particular surge in retail, agriculture, and MSME loans.
IOB's gross advances increased to ₹3.45 lakh crore, driven by RAM loans, which now constitute over 81% of total advances. Deposits grew by 20% to ₹4.07 lakh crore, with CASA deposits seeing a 21% rise. The bank has successfully onboarded millions of new CASA customers, adding substantial deposits.
The bank also raised approximately ₹11,000 crore through the RBI's swap window for lending and $200 million via external commercial borrowing, with plans for further borrowing. Asset quality improved, with gross NPAs falling to 1.19% and net NPAs to 0.16% by September.
