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IOB posts lower profit

Corporate Reporter

Treasury operations, corporate banking earn less


Makes provision for

wage revision

Pays Rs. 3.50 dividend


CHENNAI: Indian Overseas Bank has reported a sharp decline in its net profit in the year ended March 31, 2010 to Rs. 706.96 crore from Rs. 1,325.79 crore in the previous year mainly due to a sharp decline in profits from treasury operations and corporate and wholesale banking.

Following the takeover of specific assets and liabilities of Shree Suvarna Sahakari Bank of Pune in May last year, the bank has also made a part provision of Rs. 81.12 crore out of Rs 246.52 crore being the deficit representing excess of liabilities over assets.

The takeover had also resulted in a setback on the non-performing assets front and the gross NPA as on March 31, 2010 was higher at Rs.3,611.08 crore against Rs 1,923.41 crore. The profit from treasury operations declined sharply to Rs.33.29 crore during the year under review from Rs.310.44 crore. Profit from corporate and wholesale banking was lower at Rs.901.06 crore against Rs.1,145.66 crore.

The contribution of profit from retail banking was higher at Rs.975.14 crore against Rs.766.74 crore.

The bank has made a provision of Rs. 202 crore towards wage revision during the year 2009-10.

Total income for the year ended March 31, 2010 stood at Rs.11,389.03 crore against Rs.11,237.23 crore in the previous year. Revenue from corporate and wholesale banking was Rs. 4,862.74 crore (Rs.4,487.28 crore). While interest income increased to Rs. 10,245.77 crore from Rs. 9,641.40 crore, non-interest income was lower at Rs.1,143.25 crore against Rs.1,595.83 crore. Total deposits stood at Rs. 1,10,795 crore as on March 31, 2010 against Rs.1,00,116 crore at the end of March 31, 2009.

Advances have increased to Rs.80,782 crore from Rs.75,810 crore.

The Capital adequacy ratio stood at 14.26 per cent under Basel I norms and at 14.78 per cent under Basel II norms.

The bank has announced a lower dividend of Rs. 3.50 per share of Rs. 10 against Rs. 4.50 paid in the previous year.

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