Indian Overseas Bank (IOB) Q4 98/99 earnings summary

Executive summary

• FY99 deposits, advances and investments expanded; net profit was Rs.55.34 crore after wage-arrears and other provisions, while lower lending rates pressured interest spreads.

• Priorities included technology, systems and product development; Any Branch Banking and Speedy Transfer and Realisation Services were introduced.

Financial highlights

• Interest earned was Rs.2,298.96 crore and total income Rs.2,549.85 crore for FY99; total expenditure was Rs.2,494.51 crore.

• Net profit was Rs.55.34 crore versus Rs.113.05 crore in FY98; gross profit was Rs.142.96 crore after setting aside Rs.25 crore for wage arrears and making pension, gratuity, loan and contingency provisions.

• Global deposits rose from Rs.19,328.5 crore to Rs.21,914.3 crore; global advances increased from Rs.8,670.8 crore to Rs.10,117.5 crore YoY.

• Net domestic advances increased 20.5% to Rs.8,865.1 crore; net investments in India and abroad reached Rs.8,316.1 crore from Rs.7,382.0 crore.

Segment performance

• Six overseas branches across Hong Kong, Singapore, South Korea and Sri Lanka recorded substantially improved profits during FY99.

• Domestic deposits grew 15.5% to Rs.21,092.5 crore; non-resident deposits were 20.6% of total deposits and rural/semi-urban deposits 28.7%.

• Priority-sector advances reached Rs.2,951 crore, or 41.6% of net bank credit versus a 40% norm; agricultural credit was Rs.1,399.3 crore, 18.1% of net bank credit versus an 18% stipulation.

• SSI advances rose to Rs.1,242.6 crore; forex turnover was Rs.14,550 crore versus Rs.13,257 crore, while export credit remained modest amid subdued export activity.