Indian Overseas Bank tumbles on asset quality woes

NEW DELHI: Stocks of Indian Overseas Bank (IOB) tumbled nearly 8 per cent in intraday today after the lender reported a sharp 95 per cent year-on-year fall in its June quarter net profit on massive increase in provisioning for bad debts.

The stock ended the day in red, down 6.05 per cent or Rs 2.30 at Rs 35.70.

Gross non-performing assets (NPAs) for the lender surged 356 basis points to 9.40 per cent at the end of June quarter, compared with 5.84 per cent in the corresponding quarter of last year. Net NPA rose to 6.31 per cent in the first quarter against 3.85 per cent a year ago.

The state-run bank announced its quarterly numbers on Saturday.

Following the weak numbers, the stock slipped 7.63 per cent to hit its intraday low of Rs 35.10 on the BSE.

The bank said its provisions and contingencies for the June quarter stood at Rs 663 crore, compared with Rs 299 crore in the year-ago quarter.

As a result, net profit for the quarter dipped 95 per cent to Rs 15 crore against the Rs 271 crore in the same quarter of last year.

Meanwhile, the lender’s total income grew 6.16 per cent to Rs 6,672.11 crore for the June quarter against Rs 6,284.69 crore a year ago.