IOB profit up 49% in Q1; eyes $1bn mop up via overseas route

CHENNAI: Indian Overseas Bank (IOB) posted a 49.3 per cent year-on-year rise in net profit to Rs 1,659 crore in the first quarter of FY27, as the Chennai-based lender exuded confidence in mobilising $1bn through FCNR (B) route and overseas foreign currency borrowings (OFCBs).

Ajay Kumar Srivastava, managing director-CEO, IOB, said since the launch of the scheme a month ago, “we have already mobilised around $300 million under the FCNR(B) scheme. Our target is to raise nearly $1 billion by September, of which $600-650 million will come through FCNR(B) deposits and the balance through overseas borrowings.” Incidentally, the bank has already mopped up $350 million through legacy NRI customers.

Speaking to the media here on Monday, he said the bank will leverage its base of 4.52 lakh NRI customers and four overseas branches to achieve the target, given that it has two full months available before the deadline.

The lender is also set to strengthen its international presence. “We will open our GIFT City branch within the next two months,” Srivastava said, adding the branch will support the bank’s growing international banking business.

Noting that customer acquisition remains at the heart of IOB’s strategy, he said “every new customer brings opportunities across deposits, advances and cross-selling. That remains our key strategy.” The bank has onboarded 1.17 crore customers over the past 12-13 quarters. “Every new customer is hand-held for 100 days so that the relationship deepens and the customer starts using multiple banking products,” Srivastava said.

With the digital push also gathering pace, he said “it has been just six months since we came onto the UPI platform, and we have already crossed transaction volumes of around Rs 14,000 crore.”

IOB reported a 34.3 per cent increase in net interest income to Rs 3,688 crore, while total business grew 17.7 per cent to Rs 6.98 lakh crore. Advances rose 22.8 per cent and deposits increased 13.7 per cent, led by strong growth in retail, agriculture and MSME lending.

Noting that the bank is well preprepared for the expected credit loss (ECL) regime in April 2027, he said

adequate provisions were in place. Against an assessment of Rs 3,000 crore by the end of this financial year, Rs 400 crore additional provisions have been made..Also, as on June 30, the provisions made were to the tune of Rs 2,150 crore. Expecting the corporate book to grow by 12-13 per cent by the year-end, Srivastava said a credit pipeline of Rs 14,000 crore is available. IOB added 28 branches during the quarter, expanding its domestic network to 3,522 branches.

Our target is to raise nearly $1 billion by September, of which $600-650 million will come through FCNR(B) deposits and the balance through overseas borrowings