Indian Overseas Bank Sees 58% YoY Rise in Q2 Profit to ₹1,226 Crore

Indian Overseas Bank reported a net profit of ₹1,226 crore for the quarter ending September 30, 2025, marking a 58% increase year-on-year. The growth was supported by an increase in operating profit and strong performance in core banking operations, reflecting a steady improvement in the bank’s financial position.

Operating Profit and Interest Income

The bank’s operating profit rose by 12.78% to ₹2,400 crore. A significant driver of this growth was the Net Interest Income (NII), which increased by 20.53% to ₹3,059 crore. Net Interest Margin (NIM) improved for both domestic and global operations, reaching 3.35% and 3.21%, respectively. This indicates a balanced spread between interest earned and interest paid, contributing to stronger core earnings.

Efficiency and Profitability Metrics

Cost management measures led to a reduction in the Cost to Income Ratio by 321 basis points, bringing it down to 45.76%. Profitability metrics also improved, with the Return on Assets (ROA) rising by 38 basis points to 1.20% and Return on Equity (ROE) increasing by 305 basis points to 19.95%. 

Business Growth and Deposits

Total business grew by 14.10% year-on-year to ₹6,17,034 crore. Total deposits increased by 9.15% to ₹3,39,066 crore, while gross advances rose by 20.78% to ₹2,77,968 crore. The Credit to Deposit (CD) Ratio improved to 81.98%, indicating balanced lending and deposit growth. CASA deposits expanded by 4.19% to ₹1,37,387 crore, maintaining a healthy CASA Ratio of 40.52%, which supports lower-cost funds for lending operations.

Asset Quality Improvements

Asset quality showed positive trends, with the Gross Non-Performing Assets (GNPA) ratio falling by 89 basis points to 1.83%, and the Net NPA ratio reducing by 19 basis points to 0.28%. The Provision Coverage Ratio increased to 97.48%, reflecting stronger safeguards against potential credit losses and improved risk management.

Expansion of Network

The bank strengthened its presence by adding 104 domestic branches, taking the total to 3,373, and increasing ATMs and CRs by 66 to reach 3,567. The network of Business Correspondents also grew by 3,444 to 11,467, enhancing accessibility in rural and semi-urban areas.

Read More:IOB Waives Minimum Balance Penalties On SB-Public Accounts From October 1, 2025

Share Price Performance

As of October 16, 4:01 p.m., the Indian Overseas Bank share price stood at ₹39.8, down 1.12% for the day. The stock has a market capitalisation of ₹76,603 crore and is trading within a 52-week high of ₹59.9 and a low of ₹33.0. 

The share currently shows a price-to-earnings (P/E) ratio of 18.0 and a book value of ₹18.1 per share. There is no dividend yield reported, and the financial metrics show a Return on Capital Employed (ROCE) of 5.95% and ROE of 11.0%.

Conclusion

The bank’s Q2 results reflect steady growth across profit, business volume, and asset quality. Improvements in operating efficiency, NII, and capital adequacy provide a solid foundation for continued performance, while the expansion of branches and service points enhances reach and accessibility. 

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