Mumbai: Indian Overseas Bank (IOB) announced its financial results for the second quarter and first half of the financial year 2026-27. The bank’s Board of Directors approved the unaudited, reviewed standalone and consolidated financial results for the quarter and half-year ended September 30, 2026, at a meeting held in Chennai on October 26, 2026.
The bank’s performance was supported by strong net interest income, higher operating profit, improved cost efficiency and a continued reduction in bad loans. Its standalone net profit for the first half of FY27 reached ₹3,571.66 crore, marking a 52.8% increase compared with ₹2,337.46 crore in the corresponding period of the previous financial year.
IOB Q2 FY27 Financial Results
Indian Overseas Bank reported significant growth in its key financial indicators during the July-September quarter of FY27. Net profit increased to ₹1,912.42 crore from ₹1,226.42 crore in Q2 FY26, representing a year-on-year growth of 55.9%.
The key financial highlights for Q2 FY27 are as follows:
- Net profit: ₹1,912.42 crore, up 55.9% from ₹1,226.42 crore in Q2 FY26.
- Interest earned: ₹9,201.23 crore, an increase of 17.2% from ₹7,848.79 crore.
- Net interest income (NII): ₹3,866.98 crore, up 26.4% from ₹3,059.14 crore.
- Other income: ₹1,226.65 crore, down 10.2% from ₹1,365.45 crore.
- Operating expenses: ₹2,077.14 crore, up 2.6% from ₹2,024.56 crore.
- Operating profit: ₹3,016.49 crore, an increase of 25.7% from ₹2,400.03 crore.
- Provisions and contingencies: ₹950.08 crore, up 41.3% from ₹672.45 crore.
- Profit before tax: ₹2,066.41 crore, up 19.6% from ₹1,727.58 crore.
- Tax expenses: ₹153.99 crore, down 69.3% from ₹501.16 crore.
- Earnings per share (EPS): ₹0.99, compared with ₹0.64 in the corresponding quarter last year.
Net interest income represents the difference between interest earned and interest expended by the bank.
IOB Q2 FY27 Performance Compared with Q1 FY27
Compared with the first quarter of FY27, the bank recorded the following changes:
- Interest earned: Increased 4.8% to ₹9,201.23 crore from ₹8,777.57 crore.
- Net interest income: Rose 4.9% to ₹3,866.98 crore from ₹3,687.62 crore.
- Other income: Declined 43.2% to ₹1,226.65 crore from ₹2,160.23 crore.
- Operating expenses: Fell 34.2% to ₹2,077.14 crore from ₹3,154.75 crore.
- Operating profit: Increased 12% to ₹3,016.49 crore from ₹2,693.10 crore.
- Provisions and contingencies: Rose 13.9% to ₹950.08 crore from ₹834.03 crore.
- Profit before tax: Increased 11.2% to ₹2,066.41 crore from ₹1,859.07 crore.
- Tax expenses: Declined 22.9% to ₹153.99 crore from ₹199.83 crore.
- Net profit: Increased 15.3% to ₹1,912.42 crore from ₹1,659.24 crore.
- EPS: Rose to ₹0.99 from ₹0.86.
Read also: Indian Overseas Bank Achieves Rank 1 ‘Top Improver’ Under EASE 8.0 for Banking Service Improvements
IOB Net Profit Growth Supported by Lower Tax Expenses
Indian Overseas Bank’s net profit grew faster than its profit before tax during Q2 FY27, partly because of a substantial decline in tax expenses.
The bank’s tax charge fell to ₹153.99 crore from ₹501.16 crore in the corresponding quarter last year. Based on the reported figures, the effective tax rate was approximately 7.5% in Q2 FY27, compared with around 29% in Q2 FY26 and 10.7% in Q1 FY27.
Operating performance also remained strong, with operating profit increasing 25.7% year on year. The improvement reflected robust net interest income growth and relatively moderate operating expense growth.
The cost-to-income ratio, calculated using net interest income, other income and operating expenses, improved to approximately 40.8% from 45.8% a year ago. The corresponding ratio for Q1 FY27 was approximately 54%, based on the same calculation.
Despite the improvement in profitability, higher provisions and lower other income remained important factors to monitor in the bank’s financial performance.
Indian Overseas Bank Asset Quality Improves Further
Indian Overseas Bank continued to strengthen its asset quality during Q2 FY27, with both gross and net non-performing asset ratios declining compared with the previous quarter and the corresponding period last year.
The key asset quality highlights are:
- Gross non-performing assets (GNPA): ₹4,114 crore, equivalent to 1.19% of gross advances.
- Previous quarter GNPA: ₹4,292 crore, or 1.33%, in Q1 FY27.
- Year-ago GNPA: ₹5,078 crore, or 1.83%, in Q2 FY26.
- Net non-performing assets (NNPA): ₹544 crore, equivalent to 0.16%.
- Previous quarter NNPA: ₹588 crore, or 0.18%, in Q1 FY27.
- Year-ago NNPA: ₹776 crore, or 0.28%, in Q2 FY26.
- Provisions for NPAs: ₹142 crore, compared with ₹106 crore in Q1 FY27 and ₹121 crore in Q2 FY26.
The gross NPA ratio declined by 64 basis points year on year, while the net NPA ratio fell by 12 basis points. Gross NPAs decreased by approximately 19% from the year-ago quarter, while net NPAs declined by around 30%.
The reduction in bad loans indicates an improvement in the bank’s asset quality. However, provisions for NPAs increased by approximately 35% quarter on quarter, highlighting the importance of continued monitoring of credit costs.
IOB Reports Strong Net Interest Income and Operating Profit
Net interest income remained one of the key drivers of Indian Overseas Bank’s quarterly performance. NII increased to ₹3,866.98 crore in Q2 FY27 from ₹3,059.14 crore a year earlier.
The bank’s operating performance was supported by the following factors:
- Net interest income increased 26.4% year on year and 4.9% quarter on quarter.
- Interest earned rose 17.2% year on year to ₹9,201.23 crore.
- Operating profit increased 25.7% year on year and 12% quarter on quarter.
- Profit before tax grew 19.6% year on year to ₹2,066.41 crore.
- Net profit increased 55.9% year on year and 15.3% quarter on quarter.
- Operating expenses remained relatively stable compared with the corresponding quarter last year.
However, other income declined 10.2% year on year and 43.2% quarter on quarter. The bank also reported higher provisions and contingencies, which increased 41.3% year on year to ₹950.08 crore.
IOB First Half FY27 Results: Net Profit Rises 52.8%
Indian Overseas Bank delivered strong financial growth during the first six months of FY27. Standalone net profit increased 52.8% year on year to ₹3,571.66 crore from ₹2,337.46 crore in H1 FY26.
The key financial highlights for the first half of FY27 are:
- Net interest income: ₹7,554.60 crore, up 30.1% from ₹5,805.39 crore.
- Operating profit: ₹5,709.59 crore, an increase of 20% from ₹4,757.98 crore.
- Profit before tax: ₹3,925.48 crore, up 21.1% from ₹3,241.48 crore.
- Net profit: ₹3,571.66 crore, up 52.8% from ₹2,337.46 crore.
- Earnings per share: ₹1.85 for H1 FY27.
The bank’s first-half net profit was equivalent to approximately 68.6% of the ₹5,208.03 crore it earned during the entire FY26 financial year.
The strong first-half performance reflects growth in net interest income, higher operating profit and lower tax expenses during the reported periods.
IOB Capital Adequacy and Return on Assets
Indian Overseas Bank maintained capital adequacy above the applicable minimum regulatory requirements, although its capital ratios declined compared with the previous quarter.
The bank’s capital and profitability highlights are as follows:
- Capital Adequacy Ratio (Basel III): 18.60%, compared with 19.36% in Q1 FY27.
- Common Equity Tier-1 (CET-1) ratio: 16.26%, compared with 16.88% in Q1 FY27.
- Annualised Return on Assets (ROA): 1.53%, compared with 1.20% in Q2 FY26 and 1.41% in Q1 FY27.
- Net worth: ₹31,834.62 crore, up approximately 25.9% from ₹25,291.38 crore a year earlier.
- Government of India shareholding: 92.44%.
Both capital adequacy ratios were reported to be higher than their year-ago levels. The improvement in annualised ROA indicates higher profitability relative to the bank’s asset base.
IOB Loan and Deposit Growth in FY27
Indian Overseas Bank also recorded strong growth in its lending and deposit businesses during the period.
According to the market data summary provided, the bank’s advances increased 25% year on year to ₹3,42,061 crore, while deposits grew 20% to ₹4,07,428 crore.
The key business growth figures are:
- Advances: ₹3,42,061 crore, up 25% year on year.
- Deposits: ₹4,07,428 crore, up 20% year on year.
Growth in advances reflects an expansion in the bank’s lending portfolio, while the increase in deposits indicates continued growth in its deposit base. Together, these figures provide additional context for the bank’s increase in interest income and net interest income.
Indian Overseas Bank Share Price and Market Capitalisation
According to the market data provided, Indian Overseas Bank shares were quoted at ₹30.10 at 12:30 PM on October 26, 2026.
The key market indicators were:
- Share price: ₹30.10 as of 12:30 PM on October 26, 2026.
- Market capitalisation: Approximately ₹55,700 crore.
- Price-to-earnings (P/E) ratio: 9.7.
- Government shareholding: 92.44%.
The quarterly results showed strong growth in net profit, net interest income and operating profit, alongside improvements in asset quality. However, investors may also monitor the impact of higher provisions, the decline in other income and changes in capital adequacy ratios.
The share price and valuation figures relate to the specified time on October 26, 2026, and may change with market movements.
About Indian Overseas Bank (IOB)
Indian Overseas Bank is a public sector bank headquartered in Chennai, Tamil Nadu. Established in 1937, the bank provides a range of banking and financial services, including savings and current accounts, loans, deposits, digital banking, and services for individuals, businesses and institutions. The Government of India is its majority shareholder, with a reported holding of 92.44% as of September 30, 2026.
Read also: Indian Overseas Bank’s Rating Upgraded to IND AA+/Stable by India Ratings on Improved Asset Quality
