Indian Overseas Bank Profit Jumps 56% to 1,912 Crore Rupees in Second Quarter
Key Facts
Indian Overseas Bank posted net profit of 1,912 crore rupees in the quarter from July to September 2026, up 56% from 1,226 crore rupees in the year-earlier period, according to NDTV Profit. The results also showed growth in operating profit, which rose 25.7% to 3,016 crore rupees from 2,400 crore rupees a year earlier. On a quarterly basis, net profit increased 15.3% from 1,659 crore rupees in April-June 2026, while operating profit rose 12%. The jump in net profit came as profit before tax grew more slowly, while tax expenses fell sharply. The bank's shares surged more than 5% in the Oct. 26 session after the results were announced, according to NDTV Profit's coverage.
Lower taxes were a prominent factor in the widening gap between net profit growth and profit-before-tax growth. Tax expenses fell 69% year over year to 154 crore rupees in the quarter, from 501 crore rupees in the year-earlier period. By contrast, profit before tax rose 19.6% to 2,066 crore rupees, a slower pace than the 56% increase in net profit. The comparison reflects the effect of a lower tax bill on the bottom line, alongside growth in operating earnings. On a quarterly basis, operating profit and net profit continued to rise from the June quarter, increasing 12% and 15.3%, respectively.
On asset quality, the net non-performing assets ratio was 0.16% in the quarter ended September, compared with 0.18% in the previous quarter and 0.28% a year earlier. The quarterly comparison shows the ratio declining from the previous quarter's level, while the annual comparison highlights a fall from its level in the corresponding period of 2025. The provision coverage ratio was 97.69% as of Sept. 30, according to NDTV Profit. These indicators put improved asset quality alongside earnings growth at the center of the bank's results. But provision coverage remains a separate measure from the net non-performing assets ratio, and each offers a different reading of the bank's stressed assets.
Retail banking assets grew 37.8% year over year to about 2.50 lakh crore rupees in the quarter, which NDTV Profit described as a key growth driver. This comes against the backdrop of the bank's expansion in the first quarter of fiscal year 2026-2027, when it reported total credit growth of 22.75% to 3,22,132 crore rupees, compared with deposit growth of 13.72% to 3,76,193 crore rupees. Net interest income in the June quarter rose 34.30% to 3,688 crore rupees, while the domestic net interest margin was 3.48%, according to the bank's statement. In the same period, net profit increased 49.32% to 1,659 crore rupees and operating profit rose 14.21% to 2,693 crore rupees. These previous results provide context for the bank's growth trajectory ahead of the quarterly and annual increases recorded in the September quarter.
The capital adequacy ratio was 18.60% in the quarter ended September, compared with 17.94% a year earlier and 19.36% in the previous quarter. This means the ratio was above its year-earlier level but below that recorded in the June quarter, according to figures cited by NDTV Profit. The bank had previously disclosed when its September results would be considered, saying in a notice that its board would meet in Chennai on Oct. 26, 2026, to consider the unaudited and reviewed financial results for the quarter and half-year ended Sept. 30, on both a standalone and consolidated basis. The results announcement and share move came in the same session, according to NDTV Profit's coverage. The quarter's results combine earnings growth and improved non-performing asset ratios with lower tax expenses and rising retail banking assets.