Indian Overseas Bank Posts ₹12.26 Billion Net Profit in Q2 FY26, Interest Income Hits ₹78.49 Billion

Image Source: Outlook Business

Indian Overseas Bank (IOB) reported a net profit of ₹12.26 billion for the September 2025 quarter, marking a strong performance backed by robust interest income of ₹78.49 billion. The public sector lender continues to benefit from improved asset quality, higher loan growth, and stable net interest margins amid a favorable credit environment.

Indian Overseas Bank (IOB), one of India’s leading public sector lenders, has posted a solid financial performance for the second quarter of FY26, with net profit rising to ₹12.26 billion and interest income reaching ₹78.49 billion. The results reflect the bank’s continued focus on credit expansion, asset quality improvement, and operational efficiency.

Major Takeaways:

Net Profit Performance: IOB reported a net profit of ₹12.26 billion for the quarter ended September 30, 2025, up from ₹7.77 billion in the same period last year, representing a year-on-year growth of 57.7%.

Interest Income Surge: The bank’s interest earned rose to ₹78.49 billion, compared to ₹68.51 billion in Q2 FY25, driven by higher credit offtake and better yield on advances.

Total Income Growth: Total income for the quarter stood at ₹84.84 billion, up from ₹69.35 billion in the corresponding quarter last year, reflecting a 22% YoY increase.

Asset Quality Improvement: IOB continued to strengthen its balance sheet, with gross non-performing assets (GNPA) ratio declining and provision coverage ratio improving, though exact figures are awaited in the detailed filing.

Operational Efficiency: The bank’s cost-to-income ratio remained stable, supported by digital banking initiatives and branch rationalization, contributing to improved profitability metrics.

Loan Book Expansion: Advances grew across retail, MSME, and agriculture segments, with the bank focusing on priority sector lending and digital onboarding to drive disbursements.

Management Commentary: IOB’s leadership attributed the strong performance to disciplined credit underwriting, technology-led service delivery, and strategic focus on low-risk lending segments.

Notable Updates:

The bank is expected to raise capital via Tier II bonds in the coming quarters to support credit growth.
IOB is also expanding its co-lending partnerships with NBFCs to deepen rural and semi-urban penetration.
With a strong Q2 showing, Indian Overseas Bank is well-positioned to sustain its growth trajectory and enhance shareholder value in the second half of FY26.

Sources: LiveMint, Business Standard

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