Indian Overseas Bank Q4 FY25 Results: Net Profit Jumps 30% YoY

Indian Overseas Bank (IOB) announced its financial results for the fourth quarter of the financial year 2024–25 on Friday, May 2. The bank reported a strong performance, with a 30% year-on-year (YoY) increase in its standalone net profit. The net profit for Q4FY25 stood at ₹1,051.07 crore, compared to ₹808.10 crore in the same quarter last year.

Operating Profit and Net Interest Income Show Growth

The bank’s operating profit before making any provisions or accounting for contingencies also saw a significant rise. It went up by 33.5% YoY, reaching ₹2,617.92 crore, as against ₹1,961.11 crore reported in Q4FY24.

Additionally, Net Interest Income (NII), which is the income the bank earns from its lending activities minus the interest it pays on deposits, also improved. IOB reported a 13% YoY increase in NII, which rose to ₹3,123 crore.

Read More, RailTel Q4FY25 Results: Net Profit Soars 46%, Revenue Up 57% Despite Stock Dip.    

Asset Quality Improves with Lower NPAs

IOB also showed an improvement in its asset quality during the quarter. The bank successfully reduced both its Gross and Net Non-Performing Assets (NPAs):

• Gross NPA: Dropped by 21.3% YoY, standing at ₹5,347.72 crore, compared to ₹6,794.43 crore in Q4FY24.

• Net NPA: Declined by 25% YoY, reaching ₹911.86 crore, down from ₹1,216.86 crore a year earlier.

• Net NPA ratio: Improved to 0.37%, from 0.57% in the same period last year, showing better control over bad loans.

Board Approves Fundraising Plan of Up to ₹5,000 Crore for FY26

Alongside the quarterly results, IOB also shared its fundraising plans for the current financial year (FY26). The bank aims to raise up to ₹5,000 crore through a combination of equity capital and Basel III-compliant Tier II bonds.

Equity Capital Raise – Up to ₹4,000 Crore

The bank’s board has approved raising up to ₹4,000 crore in equity capital. This will include share premium (if applicable) and can be done using one or more of the following methods:

• Follow-on Public Offer (FPO)

• Rights Issue

• Qualified Institutional Placement (QIP)

• Employee Stock Purchase Scheme (ESPS)

• Preferential Issue

• Or a combination of these options

The equity may be raised in one or more phases during FY26. These proposals will be subject to necessary approvals from shareholders in the AGM/EGM and from regulatory authorities.

Basel III-Compliant Tier II Bonds – Up to ₹1,000 Crore

In addition to the equity fundraising, IOB’s board also gave approval to raise up to ₹1,000 crore through the issue of Basel III-compliant Tier II bonds. These funds will be raised based on the bank’s requirements and could be issued:

• Via private placement or public issue

• In India or abroad

• With or without a green shoe option

• In one or more phases during FY26

About Indian Overseas Bank

Indian Overseas Bank is a public sector bank headquartered in Chennai, India. It was among the 14 major banks that were nationalised by the Government of India.

As of May 2 at 3:24 PM IST, Indian Overseas Bank share price stood at ₹37.73, up ₹0.20 or 0.53% for the day. The stock opened at ₹37.54, touched a high of ₹38.40 and a low of ₹37.15 during the trading session. The bank has a market capitalisation of ₹72,750 crore and a price-to-earnings (P/E) ratio of 22.92. It has no declared dividend yield. Over the past 52 weeks, the stock has touched a high of ₹75.55 and a low of ₹33.50.

Conclusion

Indian Overseas Bank has delivered a robust Q4 performance with strong profit growth, better asset quality, and improved margins. With a ₹5,000 crore fundraising plan in place, the bank is well-positioned to strengthen its capital base and support future expansion in FY26.

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