This article first appeared on GuruFocus .
Release Date: January 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Indian Overseas Bank ( BOM:532388 ) achieved an all-time high quarterly net profit of 1,365 crore, marking a 56.18% year-on-year increase.
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The bank's business grew by 18.71% year-on-year, reaching 644,276 crore as of December 31, 2025.
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Gross NPA reduced significantly from 6,071 crore to 4,530 crore year-on-year, improving asset quality.
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The bank's return on equity (ROE) improved to 20.98%, up from 17.86% the previous year.
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The bank's capital adequacy ratio remains healthy at 16.30%, well above the mandatory requirement of 11.50%.
Negative Points
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The provision coverage ratio (PCR) decreased slightly from 97.07% to 96.97%, indicating a slight reduction in coverage for bad loans.
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The bank's CASA percentage has decreased to 40.85% globally, although domestic CASA remains at 41.29%.
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There was a significant increase in other provisions, which rose to 1,236 crore from 672 crore in the previous quarter.
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The bank's corporate loan growth remains in single digits, lagging behind other segments like retail and MSME.
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The government holding in the bank remains high at 92.44%, necessitating further dilution to meet regulatory requirements.
Q & A Highlights
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Q: With the current credit growth and CD ratio at 84.45%, how does the bank plan to maintain growth momentum and CRAR? A: The Executive Director explained that the credit growth is expected to reach 24-25% by year-end, driven by retail, agriculture, MSME, and corporate sectors. The CD ratio, excluding overseas centers, is manageable at 81.18%. The bank has also grown its retail term deposits by 16%, and the LCR is consistently maintained above 120%. The CRAR is healthy at 16.30%, and with the net profit factored in, it will be around 18.40% by year-end.
Q: Why has the provision increased significantly this quarter, and why is the tax provision only 2 crores? A: The Executive Director clarified that the provisions include an 800 crore additional standard provision as a buffer and a 1,500 crore ECL provision. The tax provision is low because the bank has moved to a new tax regime, and the DTA has been made nil.
Q: Can you provide a breakdown of corporate advances and explain why corporate loan growth is lower compared to other segments? A: The Executive Director stated that corporate advances are a mix of PSU, private players, and NBFCs. The lower growth is a strategic decision, as corporate lending is done by fewer branches and requires good pricing and risk management. The bank focuses on retail, agriculture, and MSME, which are spread across more branches and offer better interest rates.
Q: With the bank's improved fundamentals, can we expect dividends soon? A: The Executive Director mentioned that the bank came out of PCA in September 2021, and they expect to be in a position to declare dividends in the next financial year.
Q: How is the bank addressing the high GNPA in overseas operations, and what percentage of new retail loans are digitally sourced? A: The Executive Director explained that overseas GNPA is managed through local court processes, and all cases are under recovery. Approximately 13-14% of new retail loans are digitally sourced.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
