New Delhi: State-owned Indian Overseas Bank (IOB) on Wednesday reported a strong 56.2 percent year-on-year jump in net profit to ₹1,365 crore for the third quarter ended December 2025, driven by a sharp decline in bad loans and steady improvement in core banking operations.
The Chennai-based public sector lender had posted a net profit of ₹874 crore in the corresponding quarter of the previous financial year.
Total Income and Core Business Show Strong Growth
IOB’s total income for the quarter rose significantly to ₹9,672 crore, compared to ₹8,409 crore in the same period last year, according to a regulatory filing.
The bank’s interest income also registered healthy growth, increasing to ₹8,172 crore from ₹7,112 crore a year ago, reflecting higher lending activity and improved interest earnings.
Operating Profit and Net Interest Income Rise Sharply
The bank’s operating profit improved to ₹2,603 crore in the December 2025 quarter, up from ₹2,266 crore in the December 2024 quarter.
Meanwhile, Net Interest Income (NII) — a key indicator of a bank’s core performance — grew by 18 percent year-on-year to ₹3,299 crore in Q3 FY26, compared to ₹2,789 crore in Q3 FY25.
Asset Quality Strengthens as Bad Loans Decline
IOB reported a notable improvement in asset quality during the quarter.
- Gross Non-Performing Assets (GNPA) declined to 1.54 percent of gross loans as of December 2025, compared to 2.55 percent a year ago.
- Net NPAs also improved, falling to 0.24 percent, down from 0.42 percent in FY25.
The reduction in stressed assets reflects better recovery efforts and prudent credit management by the bank.
Provisioning and Capital Position
The bank’s Provision Coverage Ratio (PCR) stood at a strong 97.49 percent as of December 31, 2025, compared to 97.07 percent in the year-ago period, indicating higher buffers against potential loan losses.
However, the Capital Adequacy Ratio (CAR) moderated slightly to 16.3 percent, compared to 16.97 percent at the end of the same quarter last year, remaining comfortably above regulatory requirements.
Advances, Deposits, and Total Business Register Robust Growth
IOB’s overall business performance remained robust during the quarter –
- Total business increased 18.7 percent year-on-year to ₹6.44 lakh crore, up from ₹5.42 lakh crore, marking an absolute increase of ₹1.01 lakh crore.
- Total advances rose sharply by 24 percent to ₹2.94 lakh crore.
- Total deposits grew 14.5 percent to ₹3.94 lakh crore as of December 2025.
The growth in advances outpaced deposits, highlighting strong credit demand.
Strong Performance in Nine-Month Period
For the nine months ended December 2025, Indian Overseas Bank reported a net profit of ₹3,703 crore, significantly higher than ₹2,284 crore recorded during the same period of the previous financial year.
During this period –
- Total income rose to ₹27,752 crore, compared to ₹24,461 crore in the corresponding nine-month period last year.
- The improved profitability over the nine-month period underscores the bank’s sustained turnaround and strengthening financial fundamentals.
Outlook
With declining bad loans, rising interest income, strong credit growth, and high provisioning coverage, Indian Overseas Bank continues to consolidate its recovery momentum. The bank’s performance in the third quarter reflects improving asset quality and operational efficiency, positioning it well for stable growth in the coming quarters.
Indian Overseas Bank Overview
Indian Overseas Bank (IOB) is a leading public sector bank in India, headquartered in Chennai. Established in 1937, the bank offers a wide range of financial products and services, including retail banking, corporate banking, international banking, and treasury operations. With a network of branches across India and overseas, IOB plays a key role in providing accessible banking services to individuals and businesses, contributing to India’s financial inclusion and economic growth.
