INDIAN OVERSEAS BANK
Q2 FY 21 RESULTS REVIEW
DT 26 11 2020
COMPANY OVERVIEW
Indian Overseas Bank was founded with the twin objectives of specialising in foreign exchange business and overseas banking.
The services offered by the bank includes:
Personal banking -IOB provides a wide range of products and services such as saving bank accounts, current accounts, term deposit, retail loans, home loans and mortgages, depository services, gold investment products, debit and credit cards, multi city cheque facilities, insurance and mutual funds, and real time gross settlement services.
NRI banking -Under this the bank offers remittances, resident foreign currency accounts, NRI home loans and many other products for their NRI clients.
Corporate banking- IOB offers services such as term loans and working capital loans for micro, small, and medium enterprises; and loans for professional and self employed individuals, and information technology (IT) and ITes BPO sectors, as well as NRI accounts, and Internet and mobile banking services. In addition, they provide agricultural short term loans and agri business consultancy services; and forex collection services.
They also conduct government businesses like payment of direct taxes, indirect taxes, pension payment scheme, sales tax collections, provident fund scheme, etc -
MANAGEMENT :
Karnam Sekar : Managing Director & CEO
Ajay Kumar Srivastava : Executive Director
|
Indian Overseas Bank (in Rs. Cr.) |
Sep '20 |
Jun '20 |
Mar '20 |
Dec '19 |
Sep '19 |
YOY |
QOQ |
|
|
Interest Earned |
||||||||
|
(a) Int. /Disc. on Adv/Bills |
2847 |
2782 |
2848 |
2868 |
2840 |
0.26 |
2.36 |
|
|
(b) Income on Investment |
1437 |
1422 |
1398 |
1346 |
1264 |
13.66 |
1.04 |
|
|
(c) Int. on balances With RBI |
78.13 |
97.97 |
135.05 |
138.09 |
171.51 |
-54.45 |
-20.25 |
|
|
others |
-- |
-- |
61.07 |
-- |
-- |
|||
|
Interest Earned |
4,362 |
4,301 |
4,442 |
4,351 |
4,275 |
2.04 |
1.42 |
|
|
Other Income |
1,068.04 |
931.79 |
1,041.89 |
846.04 |
748.35 |
42.72 |
14.62 |
|
|
EXPENDITURE |
||||||||
|
Interest Expended |
2,801.24 |
2,889.52 |
2,910.40 |
3,073.19 |
3,071.76 |
-8.81 |
-3.06 |
|
|
NII |
1,561 |
1,411 |
1,532 |
1,278 |
1,203 |
10.85 |
4.48 |
|
|
Employees Cost |
803.19 |
883.98 |
874.46 |
888.5 |
741.81 |
8.27 |
-9.14 |
|
|
Other Expenses |
479.93 |
365.98 |
555.34 |
473.91 |
464.42 |
3.34 |
31.14 |
|
|
Operating Profit |
1,346.22 |
1,094.15 |
1,143.86 |
762.34 |
746.01 |
80.46 |
23.04 |
|
|
Provisions |
1,192.55 |
969.52 |
1,060.38 |
6,663.94 |
2,996.04 |
-60.2 |
23 |
|
|
Exceptional Items |
-- |
-- |
-- |
-- |
-- |
|||
|
P/L Before Tax |
153.67 |
124.63 |
83.48 |
-5,901.60 |
-2,250.03 |
? 106.83 |
23.3 |
|
|
Tax |
5.53 |
3.94 |
-7 |
173.89 |
3.61 |
53.19 |
40.36 |
|
|
P/L After Tax |
148.14 |
120.69 |
90.48 |
-6,075.49 |
-2,253.64 |
-106.57 |
22.74 |
|
|
Extra Ordinary Items |
-- |
-- |
53.31 |
-- |
-- |
|||
|
Net Profit |
148.14 |
120.69 |
143.79 |
-6,075.49 |
-2,253.64 |
-106.57 |
22.74 |
|
|
Equity |
16,436.99 |
16,436.99 |
16,436.99 |
12,585.40 |
9,141.65 |
79.8 |
0 |
|
|
ANALYTICAL RATIOS |
||||||||
|
a) % of Share by Govt. |
95.84 |
95.84 |
95.84 |
94.56 |
92.52 |
3.59 |
0 |
|
|
Basic EPS |
0.09 |
0.07 |
0.06 |
-5.83 |
-2.47 |
-103.64 |
28.57 |
|
|
Diluted EPS |
0.09 |
0.07 |
0.06 |
-5.83 |
-2.47 |
-103.64 |
28.57 |
|
|
NPA Ratios : |
||||||||
|
i) Gross NPA |
17,659.63 |
18,290.84 |
19,912.70 |
23,733.86 |
28,673.95 |
-38.41 |
-3.45 |
|
|
ii) Net NPA |
5,290.60 |
6,080.89 |
6,602.80 |
7,087.09 |
12,507.97 |
-57.7 |
-13 |
|
|
i) % of Gross NPA |
13.04 |
13.9 |
14.78 |
17.12 |
20 |
-34.8 |
-6.19 |
|
|
ii) % of Net NPA |
4.3 |
5.1 |
5.44 |
5.81 |
9.84 |
-56.3 |
-15.69 |
|
|
Return on Assets % |
0.2 |
0.16 |
0.2 |
-8.07 |
-3.15 |
-106.35 |
25 |
|
MP 11
PE 13.75
VOLUMES 3200000
|
Annual Results |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
YOY |
QOQ |
|
Interest Earned |
17,406 |
17,631 |
17,915 |
19,718 |
23,517 |
-25.99 |
-1.28 |
|
Other Income |
3,359 |
4,206 |
3,746 |
3,372 |
2,528 |
32.87 |
-20.14 |
|
Total Income |
20,765 |
21,837 |
21,661 |
23,091 |
26,045 |
-20.27 |
-4.91 |
|
Total Expenditure |
17,232 |
16,803 |
18,032 |
19,441 |
23,160 |
-25.6 |
2.55 |
|
Operating Profit |
3,533 |
5,033 |
3,629 |
3,650 |
2,885 |
22.46 |
-29.8 |
|
Provisions & Contigencies |
11,878 |
10,994 |
12,260 |
6,565 |
6,613 |
79.62 |
8.04 |
|
PBT |
-8,344 |
-5,960 |
-8,631 |
-2,915 |
-3,728 |
123.82 |
40 |
|
Tax |
182 |
-2,222 |
-2,332 |
501 |
-830 |
-121.93 |
-108.19 |
|
Net Profit |
-8,527 |
-3,737 |
-6,299 |
-3,416 |
-2,897 |
194.34 |
128.18 |
|
NPA |
|||||||
|
Gross NPA |
19,912 |
333 |
38,180 |
35,098 |
30,048 |
-33.73 |
5879.58 |
|
Gross NPA (%) |
15 |
22 |
25 |
22 |
17 |
-11.76 |
-31.82 |
|
Net NPA |
6,602 |
143 |
20,399 |
19,749 |
19,212 |
-65.64 |
4516.78 |
|
Net NPA (%) |
5.44 |
10.81 |
15 |
14 |
12 |
-54.67 |
-49.68 |
|
HISTORICAL PRICES |
ACTUAL |
|
3 YR |
24.4 |
|
2YR |
14.8 |
|
1YR |
10.75 |
|
3MON |
11.1 |
|
1MON |
9.26 |
|
1WEEK |
10.96 |
|
Type |
Dividend% |
Ex-Dividend date |
|
Final |
5 |
Jun 19, 2014 |
|
Interim |
7 |
Feb 10, 2014 |
|
Final |
20 |
Jun 20, 2013 |
|
Final |
45 |
Jun 21, 2012 |
|
Final |
50 |
Jul 04, 2011 |
|
Standalone |
Jun-20 |
Mar-20 |
Feb-20 |
Nov-19 |
|
Promoters |
95.84 |
95.84 |
95.84 |
94.56 |
|
Pledged |
0 |
0 |
0 |
0 |
|
FII/FPI |
0.12 |
0.18 |
0.17 |
0.21 |
|
Total DII |
3.03 |
2.97 |
3.02 |
4 |
|
Fin.Insts |
1.57 |
1.57 |
1.58 |
2.12 |
|
Insurance Co |
0.08 |
0.08 |
0.08 |
0.11 |
|
MF |
0.01 |
0.01 |
0.01 |
0 |
|
Others DIIs |
1.37 |
1.31 |
1.35 |
1.77 |
|
Others |
1.01 |
1 |
0.97 |
1.23 |
|
Total |
100 |
99.99 |
100 |
100 |
|
Equities & Liabilities |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Share Capital |
16,436 |
9,141 |
4,890 |
2,454 |
1,807 |
|
Reserves & Surplus |
-282 |
7,218 |
8,383 |
11,289 |
13,858 |
|
Deposits |
2,22,951 |
2,22,534 |
2,16,831 |
2,11,342 |
2,24,514 |
|
Borrowings |
5,419 |
6,146 |
9,228 |
16,097 |
27,183 |
|
Liabilities & Provisions |
16,200 |
4,968 |
8,634 |
5,982 |
7,073 |
|
Total Liabilities |
2,60,726 |
2,50,008 |
2,47,968 |
2,47,167 |
2,74,436 |
|
Assets |
|||||
|
Fixed Assets |
3,127 |
3,336 |
2,893 |
3,054 |
3,270 |
|
Loans & Advances |
1,21,333 |
1,32,597 |
1,32,488 |
1,40,458 |
1,60,860 |
|
Investments |
79,416 |
66,932 |
68,645 |
71,549 |
79,189 |
|
Other Assets |
56,850 |
47,141 |
43,939 |
32,105 |
31,116 |
|
Total Assets |
2,60,726 |
2,50,008 |
2,47,968 |
2,47,167 |
2,74,436 |
|
Other Info |
|||||
|
Capital Adequacy Ratios (%) |
11 |
10 |
9 |
11 |
10 |
|
Gross NPA (%) |
15 |
22 |
25 |
22 |
17 |
|
Net NPA (%) |
5.44 |
10.81 |
15 |
14 |
12 |
|
Contingent Liabilities |
71,030 |
56,648 |
58,366 |
68,326 |
59,999 |
STRENGTHS
Growth in Net Profit with increasing Profit Margin (QoQ)
Company with Low Debt
Company with Zero Promoter Pledge
WEAKNESSES
Red Flag: High Interest Payments Compared to Earnings
De-growth in Revenue and Profit
Low Piotroski Score : Companies with weak financials
Declining Net Cash Flow : Company not able to generate net cash
Book Value Per Share deteriorating for last 2 years
OPPORTUNITIES
Negative to Positive growth in Sales and Profit with Strong Price momentum
Decrease in NPA in recent results
Stock with Low PE (PE < = 10)
THREATS
Increase in Provisions in Recent Results
ANNUAL REPORT 2019-20 Extracts
Financial Performance - Highlights of your Bank - 2019-20 Bank was relentlessly striving to achieve Net profit at least in Q4 of FY 2019-20. as the Bank could not accomplish the same continuously for several quarters. Bank could accelerate the growth under Capital light advances such as Housing and jewel loan in order to protect the interest income under a falling interest regime. Bank could contain its expenditure despite making additional provision on employee wage settlement under negotiation. As a result, Bank could achieve operating profit to the extent of Rs 3534 Crores for FY- 19-20
Bank could reduce the gross NPA substantially from Rs 33398 Crores to Rs 19913 Crores and thereby brought down the GNPA% from 21.97% to 14.78% through multi-pronged and focused recovery initiatives.
NNPA has been brought down from Rs 14368 Crores to Rs 6603 Crores in absolute terms and from 10.81%to 5.44% in percentage terms.
The NNPA% of the Bank as on 31.3.2020 is brought down below PCA threshold .
PCR of the Bank has improved substantially as on 31.3.2020 from 71.39% to 86.94%. one of the highest in industry.
As a result, Bank could register a Net profit to the tune of Rs.144 Crores for Q4 FY -19-20.
Bank concentrated in expansion of RAM segment advances especially housing loan and jewel loan which is evident in growth of RAM share to domestic advances from 67.19% as of 31st March-2019 to 75.83% as of 31st March-2020.
Rebalancing of Corporate portfolio has resulted in reduction of overall advances.
Overall interest income has recorded marginal decline due to MCLR reduction and introduction of RLLR.
Growth under low cost deposits and shedding of high cost deposits has kept the cost of deposit under control.
CASA has improved from RS.85227 Crores as of 31st March-2019 to Rs.89751 Crores as of 31st March-2020 with a growth of 5.31%. CASA% has moved up from 38.30%as of 31st March -2019 to 40.26%as of 31st March-2020.
Bulk deposit has been brought down from Rs.28285 Crores as of March-2019 to Rs.17092 Crores as of March-2020 with a reduction of 39.57%.
Net interest income has improved from Rs.5279 Crores in FY18-19 to Rs.5303 Crores in FY-19-20.
Operating expenses has gone up marginally from Rs.4452 Crores in FY-18-19 to Rs .5129 Crores in FY- 19-20 due to one-time provision for employee wage arrears under negotiation.
Capital Position
Capital Infusion by Government of India
For the capital infusion by Government of India during 2019-20. the Bank issued a) 344,37,50,000 equity shares of Rs.10/- each for cash at issue price of Rs. 11.20 per equity share (including premium of Rs.l.20 per equity share) aggregating to Rs.3,857 Crore to Government of India on Preferential Basis on 28.11.2019 for the capital infusion received from Government of India on 27.09.2019 and b) 385,15,90,106 equity shares of Rs.10/- each for cash at issue price of 11.32 per equity share (including premium of Rs.1.32 per equity share) aggregating to Rs.4,360 crore to Government of India on Preferential Basis on 27.02.2020 for the capital infusion received from Government of India on 03.01.2020.
Raising of Tier II Bonds
During the quarter ended 30.09.2019. the Bank had raised Basel III Compliant Tier II bonds aggregating Rs.500 Crore on private placement basis at a coupon rate of 9.0802% with tenor of 10 years from the date of allotment.
Branch Network
The Bank has 3,270 domestic Branches as on 31st March 2020 as against 3,280 Branches as on 31st March 2019, comprising of 912 Rural Branches (27.89%), 960 Semi Urban Branches (29.36%), 670 Urban Branches (20.49%) and 728 Metropolitan Branches (22.26%). The Bank also has 7 Zonal Offices, 48 Regional Offices, 2 Extension Counters, 2 Satellite Offices, 3 City Back Offices and 6 Zonal Audit Offices. During the year under review (FY 2019-20), the Bank has merged 10 Branches with other existing branches
Overseas OperationsThe Bank has 6 establishments abroad, including 4 Overseas Branches, 1 Remittance Center and 1 Joint Venture Subsidiary as on 31st March 2020. The Bank has one Branch each at Singapore, Hong Kong, Bangkok and Colombo and one Remittance Centre at Serangoon, Singapore. The Joint Venture subsidiary India International Bank (Malaysia) Berhad is functioning at Malaysia. During the year 2019-20, as part of rationalization of overseas operations, Bank closed its Branch at Sukhumvit, Bangkok and merged its operations with Bangkok Main Branch. Bank also closed Seoul Branch at South Korea and the Representative Office at Dubai.The Overseas business stood at Rs. 12,359 Crores as of 31st March 2020 as compared to Rs.10,567 Crores as of 31st March 2019.
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