Earnings: IOB posts loss of Rs 516 cr in Q3 on high provisioning
IOB reported a net loss of Rs 516.03 crore for the quarter ended December 2014 due to higher provisions for bad loans.
New Delhi: Indian Overseas Bank (IOB) reported a net loss of Rs 516.03 crore for the quarter ended December 2014 due to higher provisions for bad loans.
The Chennai-based lender had earned a net profit of Rs 75.07 crore in the October-December quarter of 2013-14.
IOB is the first public sector lender to post a loss during the quarter among banks which have announced the results.
The net loss is due to increased provisions for domestic and overseas advances and also due to the conscious decision by the bank in containing its credit growth, IOB said in a statement.
Poor performance of the bank pulled its share price down by nearly 10 percent to Rs 50.50 on the BSE after the numbers were announced.
Gross NPAs as a percentage to total advances rose significantly to 8.12 percent from 5.27 percent in the same quarter an year ago.
Its net NPAs went up to 3.52 percent from 3.24 percent at the end of December 2013, IOB said in a statement.
Gross NPA in absolute terms rose to Rs 14,500.51 crore as compared to Rs 9,168.08 crore at the end of December 2013.
As a result of this, total provisions, excluding for income tax, rose to Rs 1,183.04 crore as against Rs 811.24 crore in the year-ago period.
However, the total income increased to Rs 6,647.45 crore for the quarter ended 31 December 2014 from Rs 6,190.26 crore in the same quarter last fiscal.
Operating profit of IOB also declined to Rs 726.32 crore as against Rs 960.73 crore in the year-ago period.
However, the net interest income improved marginally to Rs 1,356.85 crore as compared to Rs 1,344.45 crore in the same quarter a year ago.
Net interest margin stood at 2.05 percent at the end of the third quarter.
During the first three quarters of 2013-14, IOB has registered a net loss of Rs 489.82 crore as against a profit of Rs 333.41 crore in the year-ago period.
Total business of the bank, as on 31 December stood at Rs 4,11,354 crore, as against Rs 3,87,406 crore at end of third quarter of in 2012-13, registering 6.18 percent growth.
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