Chennai: Indian Overseas Bank (NSE: IOB, BSE: 532388) has reported its highest-ever quarterly net profit of ₹1,226 crore for the second quarter of FY26, registering a robust 57.8% year-on-year (YoY) growth compared to ₹777 crore in the same period last year. The strong financial performance was driven by increased lending, improved margins, better asset quality, and operational efficiency.
Market Performance
As of 3:07 PM IST on October 16, 2025, IOB shares were trading at ₹39.76, down 1.17% for the day. The stock opened at ₹40.60 and touched an intraday high of ₹41.05 and a low of ₹39.55. The bank’s market capitalization stood at ₹76,620 crore, with a P/E ratio of 19.37. Over the past 52 weeks, the stock has traded between ₹33.50 and ₹59.94.
Strong Financial Performance
- Net Profit: ₹1,226 crore, up ₹449 crore YoY (+57.79%)
- Operating Profit: ₹2,400 crore, up ₹272 crore YoY (+12.78%)
- Net Interest Income (NII): ₹3,059 crore, up ₹521 crore YoY (+20.53%)
- Net Interest Margin (Domestic): 3.35%, up 14 bps YoY
- Net Interest Margin (Global): 3.21%, up 13 bps YoY
- Cost-to-Income Ratio: Reduced by 321 bps to 45.76%
- ROA: 1.20% (up 38 bps YoY)
- ROE: 19.95% (up 305 bps YoY)
The bank’s improved profitability was supported by higher lending volumes, cost optimization, and a strong deposit base.
Balance Sheet Strength
IOB’s total business grew 14.1% YoY to ₹6,17,034 crore.
- Total Deposits: ₹3,39,066 crore (+9.15% YoY)
- CASA deposits: ₹1,37,387 crore
- CASA ratio: 40.52%
- CASA deposits: ₹1,37,387 crore
- Gross Advances: ₹2,77,968 crore (+20.78% YoY)
- Credit-Deposit Ratio: 81.98%
The strong growth in advances reflects the bank’s robust credit demand and focus on retail and MSME segments.
Asset Quality Improvement
IOB significantly strengthened its asset quality profile during Q2 FY26.
- Gross NPA: 1.83% (down 89 bps YoY)
- Net NPA: 0.28% (down 19 bps YoY)
- Provision Coverage Ratio: 97.48% (up 42 bps YoY)
- Credit Cost: 0.18%
- Slippage Ratio: 0.11%
The decline in NPAs highlights the bank’s effective risk management and recovery efforts.
Capital Position and Recoveries
- CRAR: 17.94%
- CET1: 15.53%
- Tier II: 2.41%
- CET1: 15.53%
- Total Recoveries in Q2: ₹874 crore
- Recoveries from written-off accounts: ₹461 crore
The robust capital adequacy places IOB in a strong position to support future business growth.
Operational Highlights
- 3,373 domestic branches, with 58% in rural and semi-urban areas
- 3,567 ATMs/CRs
- Total customer touchpoints: 18,407 (as of September 2025)
This extensive network enables IOB to serve a diverse customer base, driving financial inclusion and business expansion.
Awards and Recognition
IOB received several accolades during the quarter:
- Rajbhasha Kirti Award for outstanding Hindi implementation for the third consecutive year
- Ranked No. 1 in the Public Sector Bank Grievance Redressal Index (June–August 2025)
- SKOCH Platinum Award for innovation in the BFSI category for initiatives like IOB SMART App and enhanced risk management systems
Half-Yearly (H1 FY26) Performance
For H1 FY26, IOB reported a net profit of ₹2,337 crore, up 65.7% YoY from ₹1,410 crore in H1 FY25.
- Operating Profit: ₹4,758 crore (+25.08%)
- NII: ₹5,805 crore (+16.59%)
- Cost-to-Income Ratio: 45.01% (down 523 bps YoY)
- ROA: 1.17%
- ROE: 19.40%
The results underline consistent growth momentum across multiple parameters.
About Indian Overseas Bank (IOB)
Founded in 1937 and headquartered in Chennai, Indian Overseas Bank is one of India’s leading public sector banks offering retail, corporate, and international banking services. With a strong nationwide network and growing digital ecosystem, IOB is focused on financial inclusion, technology-led banking, and sustainable growth.
