IOB's operating profit up 63 p.c.

By Our Corporate Reporter

CHENNAI, JUNE 3. Indian Overseas Bank (IOB) has reported a 63 per cent increase in its operating profit to Rs. 306.60 crores in the year ended March 31, 2001 up from 182.23 crores in the previous year.

Announcing the financial results at a press conference here on Saturday, Mr. S.C. Gupta, chairman and managing director of the bank, said the increase was despite meeting a portion of VRS expenditure of Rs. 54.22 crores in the last quarter of the financial year.

The better growth in non-interest income, treasury and forex operations besides the effective control on cost of deposits contributed significantly to the growth in operating profit, he said. Total income was Rs. 3,095.83 crores against Rs. 2,770.75 crores with income on investments accounting for Rs. Rs. 1,247.07 crores (Rs. 1,054.52 crores).

After allocating Rs. 183.97 crores (Rs. 123.31 crores) towards other provisions and contingencies and Rs. 6.70 crores (Rs. 24.58 crores) in respect of taxation, the net profit has risen sharply to Rs. 115.93 crores from Rs. 40.34 crores. For the first time, overseas branches contributed around Rs. 36 crores to the net profit, Mr. Gupta said.

A dividend of 10 per cent has been announced, involving an outgo of Rs. 42.07 crores inclusive of dividend tax.

Other appropriations include a transfer of Rs. 34.78 crores (Rs.12.10 crores) to statutory reserve and Rs. 39.08 crores (Rs. 22.69 crores) to other reserves.

During the year under reference, the bank came out with a public issue for Rs. 111.20 crores, resulting in an increase in the paid-up capital to Rs. 444.80 crores from Rs. 333.60 crores. The bank achieved a capital adequacy of 10.24 per cent against 9.14 per cent in the previous year.

Global business exceeded Rs. 40,500 crores in the year under reference against Rs. 35,890 crores at the close of March 2000 with domestic business accounting for Rs. 38,545 crores against Rs. 33,780 crores. Total deposits crossed the Rs. 27,000-crore mark to Rs. 27,414.16 crores from Rs. 24,317.75 crores. Advances stood at Rs. 13,095.51 crores (Rs. 11,573.20 crores) with priority sector advances accounting for 47.61 per cent.

On the non-performing assets (NPA) front, Mr. Gupta said the bank could bring down its gross NPA to 11.81 per cent from 13.18 per cent in the previous year by implementing the Reserve Bank of India's revised guidelines on one-time settlement (OTS) of non- performing assets. There was a marginal drop in net NPA to 7.01 per cent from 7.65 per cent.

Mr. Gupta said the bank would continue to make efforts for full use of extension of time granted by the RBI to further reduce the NPAs in the current financial year.

The bank introduced the concept of ABB (any branch banking) covering 11 centres. Mr. Gupta claimed IOB was the first public sector bank to introduce this concept and 193 branches were under ABB network covering four metros and other important cities. Besides, the bank has 29 ATMs at various centres across the country.

On the computerisation front, Mr. Gupta said 798 branches out of the total of 1,429 were on the computer map, covering 71 per cent of total business. Internet banking facility would also be available shortly to customers, he said.

The focus of the bank would continue to be on retail credit such as educational loans, housing finance and trade finance. The recently introduced credit schemes namely `Liquirent' for financing future rent receivables and `Home decor' for furnishing houses were being well received, according to Mr. Gupta.

The voluntary retirement scheme (VRS) of the bank had received good response. As against the anticipated 2,500, applications were received from more than 3,900 staff members. As on May this year, the bank has relieved 3,200 staff members.

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