Custom Search

Saturday, October 27, 2012

Indian Overseas Bank Q2 profit dips 24%

As a result of interest reversal on restructured loan accounts during the quarter, Indian Overseas Bank reported a 24 per cent drop in net profit for the quarter ended September 30 at Rs 158.43 crore against Rs 207.46 crore in the corresponding previous year quarter.

The bank’s total income rose to Rs 5,515.02 crore from Rs 4,822.56 crore, registering a growth of 14.36 per cent. Announcing the results, the bank’s Chairman and Managing Director M. Narendra, said interest reversal on restructured accounts and additional provisions made during the quarter amounted to Rs 168 crore. “But for that, our gross and net profits would not have fallen,” he said.

Gross NPAs (non-performing assets) as on September 30, went up to Rs 5,930 crore from Rs 3,898 crore in the previous year. Narendra said this was because there were a few major accounts which turned NPAs during the quarter. According to him, nine major accounts — from pharma, engineering and manufacturing sectors — worth Rs 650 crore became NPAs.

“However,” he said, “some of them are in the process of a corporate debt restructuring programme and the results are expected.”

Giving the break-up of the gross NPA, he said while domestic NPAs accounted for Rs 5,300 crore, overseas NPAs accounted for Rs 629 crore. Net NPAs at the end of the quarter stood at Rs 3,378 crore (2.25 per cent) as against Rs 1,505 crore (1.21 per cent) in the previous year.

Net interest margin for the bank stood at 2.46 per cent.

He said the bank’s recovery and upgradation target for the current (third) quarter is Rs 500 crore.

Equity infusion


Narendra said the Government is “actively considering” Rs 1,500-crore equity infusion during the current financial year.

Last year, the government infused Rs 1,441 crore. Total restructured loans at the end of the quarter stood at Rs 14,775 crore. Of this, a major portion was from the power sector (around Rs 3,438 crore). This was followed by textile (Rs 1,630 crore), aviation (1,448 crore), iron and steel (Rs 1,082 crore) and telecom (around Rs 1,055 crore).

According to Narendra, the bank has been in the process of recruiting over 300 rural development officers, and opening 40 specialised agriculture credit branches in Maharashtra, Karnataka, Uttar Pradesh and Chhattisgarh to handle agri business exclusively.

In the first half of the current financial year, the bank disbursed Rs 15,500 crore under special agriculture credit plan as against the annual target of Rs 26,875 crore. The bank has also taken special initiatives for MSME lending.

ravikumar.ramanujam@thehindu.co.in

0 comments:

Post a Comment

Popular Posts

 
Desi Google | A2Z Famous Quotes | What's Cooking America | Joke Site