Shares of Indian Overseas Bank (IOB) continued losing streak on Tuesday, extending losses for the fourth straight session. The state-owned bank’s shares have fallen nearly 1% today and around 7% since April 29. On Monday, the stock ended 2% lower, in sync with Nifty PSU Bank index with all indices closing in red, after the Reserve Bank of India (RBI) released a draft proposing tighter project finance norms. The sentiment was further dented after IOB announced that it will sell 92 non-performing accounts having ₹13,472 crore loan outstanding.
Early today, Indian Overseas Bank shares opened a tad higher at ₹64.77 against the previous closing price of ₹64.76 on the BSE. The stock rose as much as 0.9% to ₹65.33 but soon slipped into negative terrain. The counter fell nearly 2% from opening high levels to hit a low of ₹64.03, while the market capitalisation (m-cap) dipped to ₹1.21 lakh crore.
IOB shares touched its 52-week high of ₹83.80 on February 8, 2024, rebounding 255% from its 52-week low of ₹23.57 hit on May 25, 2023. Driven by sustained rally, the m-cap of the PSU lender crossed ₹1 lakh crore marks for the first time on February 2 this year, becoming the fifth public sector lender to achieve this milestone after State Bank of India, Bank of Baroda, Union Bank of India, and Punjab National Bank.
IOB to auction 92 NPAs worth ₹13,472 cr
IOB on Sunday said that it will auction 92 non-performing loans with an aggregate outstanding of ₹13,471.68 crore on May 28, at a reserve price of over ₹4,000 crore. The list of bad loan accounts includes Videocon Industries (₹900 crore), Frost International (₹839 crore), Rotomac Global (₹750 crore), and others such as Lanco, IL&FS Financial Services, Jet Airways and Reliance Communications. The PSU bank has invited interested Asset Reconstruction Companies (ARCs) and other eligible buyers to submit their Expressions of Interest (EOI) by May 13, 2024, to participate in the e-auction.
The bad loans of the Chennai-based lender will be sold two lots through e-auction under the open auction method. The first lot comprises 46 accounts financed under consortium arrangements, three accounts under multiple banking arrangements, with the remaining two accounts being sole banking ventures. Besides, 38 accounts within the portfolio are formally admitted under the purview of NCLT. The second portfolio consists of 41 sole banking accounts, as per PTI report.
The board of IOB is set to meet on May 9 to consider and approve financial results for the fourth quarter and year ended March 31, 2024. In the third quarter of FY24, the bank's gross Non-Performing Assets (NPAs) declined to 3.90% of gross loans from 8.19% a year ago. The net NPA dropped to 0.62% in Q3 FY24 as compared to 2.43% in FY22. The provisions for bad loans also declined to ₹367 crore from ₹711 crore a year ago.
In Q3 FY24, IOB posted 30% year-on-year (YoY) growth in its net profit at ₹723 crore, aided by improved core income and reduced bad loans. The total income of the lender rose to ₹6,176 crore over ₹5,056 crore in the quarter ended December 2022. The net interest income stood at ₹6,176 crore versus ₹5,056 crores in Q3 FY23, while Non-interest income increased to ₹1,262 crore from ₹950 crore in the three months ended December 31, 2022.
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