Business Economy

IOB to focus on recovery, improving margins

Public sector lender Indian Overseas Bank’s (IOB) current focus would be on reducing its net non-performing assets (NPAs) and coming out of the Prompt Corrective Action (PCA) framework of the Reserve Bank of India during the current fiscal, said a top official.

“The current year’s focus will be on improving net interest margin, net interest income, bringing down net NPAs from the present 11% to 6%, improving capital adequacy and growing the assets,” said Karnam Sekar, managing director and chief executive officer, IOB.

Recovering money

Admitting that IOB was relatively slower in coming out of the RBI’s watchlist as compared with its peers, he elaborated on measures taken by the bank for recovering monies, such as appointing a special task force to monitor big one-time settlement cases, selling assets to asset restructuring companies and recovering educational loans.

He said all these would enable the bank to improve profitability and “enable us to come out of the PCA framework of the Reserve Bank during the current year. We will turn to profit during the second quarter,” he added.

Mr. Sekar said the bank had sought ₹6,000 crore from the central government as capital.

When pointed out that his predecessor had said that IOB would return to black during the first quarter of 2020, he said it would get shifted by one or two quarters. However, the bank was on its way to recovery, he added.

Interacting with the media, Mr. Sekar said that over the last few days, he had had the first the round of interaction with senior officials, to gauge the mood.

He said while some automated teller machines would be relocated, none of the branches would be closed down. Over the last few months, the number of loss-making branches was reduced to 45, he added.

“The recovery in the last few quarters was not up to the desired level. But, it has been more than the slippages. Slippages have been contained,” he added.

Source: thehindu.com

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