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IOB net profit rises to Rs. 1,008 cr.

Special Correspondent

To go in for a `re-balancing of its credit portfolio'; to pay 30 p.c. dividend

T. S. Narayanasami

CHENNAI: Indian Overseas Bank (IOB) has decided to go in for a `re-balancing of its credit portfolio' in the wake of general caution sounded by the Reserve Bank of India and the finance ministry. Indicating this at a press conference here on Monday, T.S. Narayanasami, Chairman and Managing Director (CMD), said IOB would re-look at credit to the real estate sector and consumer lending. Lending to productive sectors and agriculture would continue to get priority, however, he added.

To a specific question, he said IOB would go a `bit slow' on housing loans. In this context, he pointed to reports about fake documents and salary certificates. The CMD said the authority for sanctioning home loans had now been vested with regional managers. Earlier, branch managers had the authority to sanction such loans, he added.

The CMD said there would be slowdown in credit. This would obviate the need for the bank to go in for high cost deposits, he added. IOB, he said, would strive to increase the percentage of low cost deposit to 42 from the current 36.

IOB has reported a net profit of Rs. 1,008.43 crore for the year ended March 31, 2007, up from Rs. 783.34 crore in the preceding year. Total income has risen to Rs. 6,219.12 crore (Rs. 4,947.41 crore). The core operating income stands at Rs. 5,981.75 crore, up by 26.90 per cent over the previous year. The net interest income has gone up to Rs. 2,560.80 crore (Rs. 1,855.52 crore). Aggregate deposits have risen to Rs. 68,746 crore (Rs. 50,529 crore). The credit-deposit ratio stands at 69.71 per cent. Total business of the bank is placed at Rs. 1,16,669 crore (Rs. 86,289 crore).

Gross NPA (non-performing assets) is placed at Rs. 1,120.21 crore (Rs. 1,227.55 crore).

In percentage terms, the gross NPA stands at 2.34 per cent, down from 3.43 per cent in the preceding year.

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