Indian Overseas Bank’s (IOB) standalone net profit for the June quarter rose 27% to ₹633 crore from the year-earlier period on improvement in asset quality, slippages and interest and non-interest income. Interest income rose to ₹6,535 crore from ₹5,424 crore, while net interest income increased by 5% to ₹2,441 crore.

“Net interest margin contracted to 3.06% from 3.21% due to increase in cost of funds and borrowings. For the current fiscal, we will try to maintain it at 3.06%-3.10%,” MD & CEO Ajay Kumar Srivastava said in a press meet.

Slippages reduced by 48% to ₹277 crore. Total recovery was ₹582 crore. The bank has set a target to recover about ₹5,500 crore in FY25 against ₹4,700 crore recovered in FY24.

“For Q1,we had kept a recovery target of ₹900 crore, but ended up recovering ₹582 crore as open auctions for some of the assets did not happen. However, we are hopeful of making good the shortfall in Q2,” he said.

Gross non-performing asset decreased by 424 bps to 2.89% and net NPA reduced by 93 bps to 0.51%.

IOB’s Capital Adequacy Ratio rose to 17.82% from 16.56%. Provision Coverage Ratio increased to 96.96 from 94.03%.

Total business of the bank rose 16% to ₹5.29 lakh crore, of which advances accounted for ₹2.31 lakh crore and deposits ₹2.99 lakh crore. Current account savings account (CASA) deposits rose to ₹1.26 lakh crore from ₹1.17 lakh crore.

For FY25, the bank has set a credit growth target of 13% against 16% achieved in FY24. It is also planning to bring down the Retail Agriculture MSME (RAM) sector advances to 65% from the present 72% in the current fiscal.

On fund raising, he said the board had given its approval for raising ₹5,000 crore and was awaiting other regulatory approvals. “It could be QIP or FPO or both. The fund raise was necessitated to bring down the GOI holding from 97% to 75. In the current fiscal, it could come down by 10-12%,” he added.