Chennai, June 23: Despite the past year being marked by poor credit off-take and higher cost of deposits, Indian Overseas Bank (IOB) has recorded a massive jump in its profit figures. Net profit surged past the Rs 100 crore mark during 1996-97 to touch Rs 104.51 crore up from the previous year's Rs 3.20 crore.This was accompanied by a similar leap in gross profit which ended 1996-97 at Rs 129.45 crore from Rs 21.95 crore last year.

This accomplishment, said the bank in an official release here on Monday, has helped IOB wipe out its accumulated losses and nearly double its capital adequacy ratio during the year.

The bank has credited this achievement to ``efficient fund management, overhead cost control, thrust on fee income, recovery of hard core bad debts and focused attention on resource mix and credit products.''

Deposits surged, said the bank, with global deposits standing at Rs 15,972.6 crore and domestic deposits at Rs 14,860.6 crore. Advances, global and domestic, stood at Rs 7254 crore and 6011.3 crore respectively. Customer deposits registered a 21.3 per cent growth which helped IOB to bring down the high cost Certificate of Deposit from Rs 943.5 crore to Rs 6.5 crore.

The rise in profit by IOB has been helped by its non performing asset (NPA) figure going down. The bank recovered Rs 159.4 crore worth problem credit in India while the overseas branches combined recovered Rs 118 crore. This has helped the ratio of NPA to net advances declining to 7.64 per cent from the 8.62 per cent registered in 1995-96. Investments in India have expanded to Rs 6422.4 crore from Rs 5878 crore.

IOB saw cost of deposits increase to 8.45 per cent from 7.65 per cent during 1996-97, its `Diamond Jubilee' year. Cost of funds increased too, going up to 8.62 per cent from the previous year's 8.30 per cent.

Yields have also improved during the year, with yield on investments going up to 12.23 per cent from 11.85 per cent and the yield on advances increasing to 14 per cent from 12.70 per cent.

Interest spread has also shown a marginal increase going to 2.54 per cent from 2.44 per cent in 1995-96. The release further said, the per employee business stood at Rs 81 lakh for the recently concluded year.The capital adequacy ratio has almost doubled to 10.07 per cent from the previous year's 5.95 per cent. This has helped the bank in leveraging for adequate credit and asset expansion. During the year, the bank has brought the number of totally automated branches to 37, an increase by 10, while partial computerisation was carried out in 40.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.