A recent press report said that Indian Overseas Bank has posted a net profit Rs. 207. 46 crore for the second quarter ended September 30, 2011. The net profit has increased by only 0.64 per cent compared to the corresponding quarter last year which was Rs. 206.15 crore. The bank reported a total income of Rs. 4, 822.56 crore for this second quarter which has been increased to about 56. 84 per cent from the corresponding period of previous year which was Rs. 3, 074 crore.
According to Mr. M. Narendra, Chairman and Managing Director the decrease in the net profit was mainly due to high provisioning in the nonperforming assets (NPAs). Besides, high NPA there has also been an increase in advances and standard asset provisioning.
He said that they have expected that by the last quarter of the financial year the net profit would increase if they were able to recover more NPAs and also if the NPAs were controlled to a great extent.
During the second quarter of this financial year the gross NPA increased to Rs. 3, 898 crore from Rs. 3, 326 crore during the same period last year.
Mr. Narendra added that the bank would achieve a target of Rs. 3.50 lakh crore by the end of this financial year.
The retail loan portfolio of the bank includes Clean Loan, Consumption Loans-Sahayika, Educational Loans-VidyaJyoti, Vehicle Loans- Phushpaka, Commercial cash Credit against Jewellery etc.