Synopsis: Indian Overseas Bank, a PSU bank, reports 20.53% YoY net interest income growth and a 57.79% YoY net profit surge in Q2 FY26 results.
This PSU Bank Stock, engaged in providing comprehensive banking and financial services, including retail and corporate banking, loans, credit cards, and digital banking solutions, jumped 2 percent after the bank reported September quarterly results with a 57.79 percent YoY increase in net profit.
With a market capitalization of Rs. 76,602.71 crores, the share of Indian Overseas Bank has reached an intraday high of Rs. 41 per equity share, rising nearly 1.91 percent from its previous day’s close price of Rs. 40.23. Since then, the stock has retreated and is currently trading at Rs. 39.78 per equity share.
Q2 FY26 Result Walkthrough
Coming into the quarterly results of Indian Overseas Bank Limited, the company’s net interest income increased by 20.53 percent YOY, from Rs. 2,538 crore in Q2 FY25 to Rs. 3,059 crore in Q2 FY26, and grew by 11.40 percent QoQ from Rs. 2,746 crore in Q1 FY26.
In Q2 FY26, Indian Overseas Bank’s consolidated net profit increased by 57.79 percent YOY, reaching Rs. 1226 crore compared to Rs. 777 crore during the same period last year. As compared to Q1 FY26, the net profit has increased by 10.35 percent, from Rs. 1,111 crore.
Indian Overseas Bank’s Net interest Margin (NIM) domestic reached 3.35 percent from 3.21 percent in the previous quarter, which increased by 14 basis points. Net Interest Margin (NIM) Global increased by 13 basis points, from 3.08 percent in Q2 FY25 to 3.21 percent in Q2 FY26.
Indian Overseas Bank demonstrated robust year-over-year growth in its core banking metrics, with total deposits expanding from Rs. 310,652 crore to Rs. 339,066 crore, reflecting a healthy increase of 9.15 percent.
Complementing this, total advances surged more impressively from Rs. 230,149 crore to Rs. 277,968 crore, marking a 20.78 percent rise that underscores the bank’s aggressive lending strategy and strengthened market position amid favorable economic conditions.
NPA Performance and Financial Highlights
Indian Overseas Bank’s Gross Non-Performing Assets (GNPA) ratio reduced by 89 basis points, from 2.72 percent in Q2 FY25 to 1.83 percent in Q2 FY26. The Net NPA ratio also reduced by 19 basis points, from 0.47 percent in Q2 FY25 to 0.28 percent in Q2 FY26
In terms of return ratios, the company’s ROA and ROE stand at 1.20 percent and 19.95 percent, respectively. Indian Overseas Bank’s CASA Ratio stood at 40.52 percent, and its debt-to-equity ratio is 11.1x.
Company Overview
Indian Overseas Bank (IOB) was founded in 1937 by Shri M.Ct.M. Chidambaram Chettyar and is engaged in providing comprehensive banking and financial services, including retail, corporate, and international banking.
The bank is engaged in offering services such as deposits, loans, foreign exchange, treasury operations, and remittances across a widespread network of over 3,373 domestic branches, 3,567 ATMs, and multiple international offices.
IOB is engaged in serving customers through traditional and digital channels, focusing on inclusive banking, trade finance, and overseas banking services, with a presence in Singapore, Hong Kong, Thailand, and Sri Lanka. The bank is engaged in strengthening its technology platforms to enhance customer experience and operational efficiency, aiming to grow its market presence and contribute to financial inclusion.
Written By – Nikhil Naik
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