IOB Q2 net profit jumps 56% to ₹1,912 crore; gross NPA ratio falls to 1.19%

Indian Overseas Bank (IOB) on Monday reported a 56% year-on-year increase in net profit to ₹1,912 crore for the second quarter of FY27, aided by higher interest income and an improvement in asset quality. The public sector lender had posted a net profit of ₹1,226 crore in the corresponding quarter of the previous financial year.

Interest income rose 17% to ₹9,201 crore in the July-September quarter, compared with ₹7,849 crore a year earlier. The bank’s gross non-performing assets (NPAs) as a proportion of gross advances also declined, pointing to an improvement in the quality of its loan book. IOB shares were trading at ₹30.01 on the BSE, up 4.56% from the previous close.

IOB’s interest income rises 17% in Q2

The increase in interest income provided a key boost to the bank’s quarterly earnings. Interest income climbed from ₹7,849 crore in Q2 FY26 to ₹9,201 crore in Q2 FY27, reflecting higher income from its lending and other interest-bearing assets.

Net interest income (NII), the difference between interest earned and interest expended, rose 26.4% year-on-year to ₹3,867 crore in the September quarter, compared with ₹3,059 crore a year earlier. Operating profit increased 25.7% to ₹3,016 crore from ₹2,400 crore, according to the bank’s quarterly results. <Cite refs={["turn236813search1","turn236813search6"]}/>

Gross NPA ratio declines to 1.19%

IOB continued to report an improvement in asset quality during the quarter. Gross NPAs fell to 1.19% of gross advances at the end of September, compared with 1.83% in the year-ago period. The ratio had stood at 1.33% at the end of the June quarter, indicating a further sequential improvement. Net NPAs also declined to 0.16% from 0.28% a year earlier. <Cite refs={["turn236813news4","turn236813search1"]}/>

The reduction in bad-loan ratios is an important indicator of the bank’s asset quality and its ability to manage credit risks. However, provisions and contingencies increased to ₹950 crore in Q2 FY27 from ₹672 crore in the corresponding quarter last year, a factor to watch alongside earnings growth. <Cite refs={["turn236813search1","turn236813search6"]}/>

IOB shares rise 4.56% on BSE

IOB shares were trading at ₹30.01 on the BSE, up 4.56% over the previous close, following the announcement of the September-quarter results. The stock movement came as investors assessed the bank’s profit growth, higher interest income and improvement in asset quality.

The quarterly performance places the focus on whether the lender can sustain growth in core interest income while continuing to reduce bad loans and manage credit costs in the coming quarters.