State-owned Indian Overseas Bank (IOB) reported a robust 49.32% year-on-year rise in net profit to ₹1,659 crore for the first quarter ended June 30, 2026, driven by strong growth in net interest income, healthy credit expansion and a sharp improvement in asset quality.
The Chennai-headquartered lender’s operating profit increased 14.21% to ₹2,693 crore, while net interest income (NII) grew 34.30% to ₹3,688 crore during the quarter.
Credit growth remains strong
The bank’s total business expanded 17.72% year-on-year to ₹6.98 lakh crore, supported by robust growth in advances.
Total advances rose 22.75% to ₹3.22 lakh crore, significantly outpacing deposit growth of 13.72%, which reached ₹3.76 lakh crore. Savings Bank deposits increased 18.14% to ₹1.27 lakh crore, while retail term deposits grew 15.81% to ₹1.87 lakh crore.
Growth was particularly strong in the bank’s Retail, Agriculture and MSME (RAM) portfolio, which expanded 35.82% year-on-year. Within the segment, retail advances grew 36.49%, agriculture 46.84%, and MSME lending 16.15%.
Asset quality improves further
IOB continued to strengthen its asset quality during the quarter. Gross Non-Performing Assets (GNPA) declined to 1.33% from 1.97% a year earlier, while Net NPA improved to 0.18% from 0.32%, reflecting sustained recovery efforts.
Fresh slippages fell to ₹195 crore, with the slippage ratio dropping to a historic low of 0.06%.
During the quarter, the bank recovered ₹654 crore of bad loans, more than 3.3 times the fresh slippages, while the Provision Coverage Ratio (PCR) improved to 97.67%, one of the highest in the banking industry.
Profitability ratios strengthen
The bank’s profitability metrics also improved. Return on Assets (RoA) rose to 1.41%, while Return on Equity (RoE) increased to 22.69%. Domestic Net Interest Margin (NIM) improved to 3.48%, with global NIM rising to 3.37%.
Capital adequacy remained comfortable, with the Capital to Risk-weighted Assets Ratio (CRAR) at 19.36%, including a Tier-I ratio of 16.88%.
Branch expansion continues
During the quarter, IOB added 28 new branches, taking its domestic branch network to 3,522 branches, as it continued to strengthen its presence across the country.