IOB plans recovery of Rs.1,500 crore from sticky accounts (Lead)January 28th, 2012 - 8:40 pm ICT by IANS
Chennai, Jan 28 (IANS) With its Q3 profits down by 53 percent due to restructuring of loan accounts and the resultant reduction in income, the government-owned Indian Overseas Bank (IOB) is hoping to recover around Rs.1,500 crore this fiscal to reduce its non-performing assets (NPA), said a top bank official Saturday.
“We had restructured our loan book worth Rs.3,600 crore which in turn resulted in reversal of Rs.75 crore interest income in two major loan accounts. The restructured accounts belonged to companies in telecom tower, power distribution, paper and other sectors,” bank chairman and managing director M. Narendra told reporters here.
He said the company is targeting to recover Rs.1,500 crore this fiscal.
The bank’s overall non-performing assets (NPA) stands at Rs.3,971 crore.
The bank reported a massive 53 percent decline in net profit at Rs.108.27 crore for the quarter ended Dec 31, 2011, against Rs.231.66 crore during the like period of the previous financial year.
Total income was up 45 percent at Rs.5,015.33 crore during the quarter under review, compared to Rs.3,452.86 crore in the year-ago period, the company said in a regulatory filing.
According to him the bank’s total business grew from Rs.225,191 crore (deposits Rs.125,062 crore, advances Rs.100,129 crore) as on 31.13.2010 to Rs.299,555 crore (deposits Rs.167,006 crore, advances Rs.132,549 crore) recording a growth of 33 percent.
Narendra is hopeful of the central government infusing Rs.1,450 crore as additional capital by the end of this fiscal which would take the bank’s tier I capital adequacy ratio (CAR) to eight percent.
He said the bank will increase branch network by 300 to 2,700 branches by the end of this fiscal and the number of branches in Tamil Nadu will touch 1,000.
“Last calendar year we opened 354 branches including 11 asset recovery branches,” Narendra said.
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