Chennai: Indian Overseas Bank (IOB) achieved a historic milestone as its annual net profit surpassed Rs 5,000 crore for the first time. The public sector lender reported a net profit of Rs 5,209 crore for the fiscal year 2025-26 (FY26), marking a 56% increase from Rs 3,335 crore in the previous fiscal year. This growth was primarily driven by higher income and lower provisions and tax expenses.
Operating Profit and Net Interest Income
The bank's operating profit also crossed the Rs 10,000 crore mark for the first time, rising 15% to Rs 10,026 crore from Rs 8,688 crore in FY25. This was supported by a 15% increase in net interest income (NII), which stood at Rs 12,574 crore in FY26 compared with Rs 10,890 crore in the previous year.
Quarterly Performance
For the quarter ended March 31, 2026, net profit rose 43% to Rs 1,505 crore from Rs 1,051 crore in the same period a year ago. Net interest income for the March 2026 quarter grew 11% to Rs 3,470 crore, compared with Rs 3,123 crore in the corresponding quarter of the previous year.
Asset Quality and Slippages
Total slippages for the fourth quarter of FY26 stood at Rs 366 crore, while full-year slippages were at Rs 1,211 crore. The slippage ratio was 0.13% for Q4 FY26 and 0.49% for FY26. Notably, the bank reported nil slippages in the corporate and overseas segments over the last two quarters, with the corporate book maintaining zero slippages for the entire FY26.
"With no significant fresh additions to stressed assets, the recovery pool has declined, making year-on-year comparisons less meaningful," said Ajay Kumar Srivastava, Managing Director and CEO of IOB. Total recoveries stood at Rs 960 crore in Q4, while for the full year they were Rs 3,576 crore. FY26 recoveries were nearly three times the annual slippages, he added.
NPA Ratios and Business Growth
The gross non-performing asset (NPA) ratio declined by 72 basis points year-on-year to 1.42%, while the net NPA ratio fell by 16 basis points to 0.21%. As of March 2026, total deposits rose 18% year-on-year to Rs 3.68 lakh crore, while total advances grew 24% to Rs 3.10 lakh crore.
