Aided by robust growth in net interest income and non-interest revenue, Indian Overseas Bank (IOB) stated on Monday that its net profit for the first quarter of FY27 increased by 49.32 percent year over year to ₹1,659 crore from ₹1,111 crore in the same time last year. Net profit increased by 10.23 percent from ₹1,505 crore in Q4 of FY26.
The quarter's net interest income (NII) was ₹3,688 crore, up 34.30 percent from the same period last year. This was due to the ongoing moderation in the cost of deposits, which decreased to 4.70 percent from 5.10 percent.
Priority sector lending certificate (PSLC) commission increased more than thrice to ₹863 crore, driving a 45.85 percent year-over-year increase in non-interest income to ₹2,160 crore.
Non-interest income has shown a growth of 45.85 per cent, primarily driven by PSLC sales and recovery from technically written-off accounts, in addition to normal non-interest income," said Ajay Kumar Srivastava, Managing Director and CEO of Indian Overseas Bank.
The bank's domestic net interest margin (NIM) improved by 31 basis points year-on-year to 3.48 per cent in the June quarter, while global NIM rose by 33 basis points to 3.37 per cent.
Total provisions declined 1.18 per cent year-on-year to ₹834 crore from ₹844 crore in Q1 FY26, even as they fell 17.10 per cent sequentially from ₹1,006 crore in Q4 FY26. Of this, NPA provisions dropped sharply by 40.45 per cent year-on-year to ₹106 crore, while other provisions rose 9.31 per cent to ₹728 crore.
Operating expenses rose 68.81 per cent year-on-year to ₹3,155 crore in Q1 FY27, driven largely by an 80.45 per cent jump in staff expenses to ₹2,104 crore. Other expenses grew 49.36 per cent to ₹1,050 crore. The sharp rise in staff costs pushed the cost-to-income ratio up to 53.95 per cent from 44.22 per cent a year earlier.
On asset quality, gross non-performing assets (GNPA) stood at ₹4,292 crore as of June 2026, down 17.11 per cent from ₹5,178 crore a year earlier. Net NPAs fell 27.94 per cent to ₹588 crore from ₹816 crore. The GNPA ratio improved to 1.33 per cent from 1.97 per cent a year ago and 1.42 per cent in the previous quarter. The net NPA ratio stood at 0.18 per cent, compared with 0.32 per cent a year ago and 0.21 per cent in Q4 FY26. The provision coverage ratio (PCR) improved to 97.67 per cent from 97.47 per cent a year earlier.
The bank's capital adequacy ratio (CRAR) stood at 19.36 per cent as of June 2026, compared with 18.28 per cent a year earlier and 19.78 per cent in the preceding quarter.
On the business front, global advances stood at ₹3.22 trillion as of June 2026, up 22.75 per cent year-on-year, while total deposits rose 13.72 per cent to ₹3.76 trillion, taking the bank's total business to ₹6.98 trillion, up 17.72 per cent. The retail, agriculture and MSME (RAM) segment continued to gain share, rising to 81.21 per cent of domestic advances from 73.39 per cent a year earlier, with agriculture advances up 46.84 per cent and retail advances up 36.49 per cent year-on-year.
Current and savings account (CASA) deposits grew 6.61 per cent year-on-year to ₹1.54 trillion, though the CASA ratio (as a percentage of total deposits) slipped to 41.05 per cent (global) from 43.78 per cent a year earlier as term deposits grew faster. The credit-deposit ratio rose to 85.63 per cent (global) from 79.33 per cent, up 630 basis points year-on-year.
