IOB Q2 FY26 results: Profit up 58% YoY at Rs 1,226 crore; asset quality strengthens

Indian Overseas Bank (IOB) on Thursday reported a strong performance for the July–September quarter (Q2 FY26), with standalone net profit rising 57.79 per cent year-on-year (YoY) to Rs 1,226 crore compared to Rs 777 crore in the same period last year.

Net interest income (NII) rose 20.53 per cent to Rs 3,059 crore as against Rs 2,538 crore in Q2 FY25. The bank's domestic net interest margin (NIM) improved by 14 basis points (bps) to 3.35 per cent and global NIM increased by 13 bps to 3.21 per cent.

Cost efficiency showed progress, with the cost-to-income ratio declining by 321 bps to 45.76 per cent from 48.97 per cent a year earlier. Return on assets (ROA) climbed 38 bps to 1.20 per cent, while return on equity (ROE) rose 305 bps to 19.95 per cent.

Asset quality improved notably during the quarter. The gross non-performing assets (GNPA) ratio fell 89 bps YoY to 1.83 per cent from 2.72 per cent, while the net NPA ratio declined 19 bps to 0.28 per cent from 0.47 per cent.

Sequentially, GNPA and NNPA were down by 14 bps and 4 bps, respectively. The provision coverage ratio (PCR) increased to 97.48 per cent from 97.06 per cent, with the slippage ratio steady at 0.11 per cent. Credit cost stood at 0.18 per cent.

Total deposits grew 9.15 per cent YoY to Rs 3,39,066 crore from Rs 3,10,652 crore and were up 2.50 per cent on a sequential basis. Gross advances rose 20.78 per cent YoY to Rs 2,77,968 crore from Rs 2,30,149 crore, registering a 5.92 per cent increase quarter-on-quarter.

Current Account Savings Account (CASA) deposits stood at Rs 1,37,387 crore, up 4.19 per cent YoY, while the CASA ratio was at 40.52 per cent as on September 30, 2025. The credit-to-deposit (CD) ratio stood at 81.98 per cent.

On the stock-specific front, IOB was last seen trading 0.84 per cent lower at Rs 153.60.