Indian Overseas Bank Q2 profit grows 58% y-o-y driven by robust credit growth

Ajay Kumar, Srivastava, Managing Director & CEO, Indian Overseas Bank, at a press conference in Chennai on Thursday
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Indian Overseas Bank announced a 57.8% surge in net profit for the September 2025 quarter (Q2FY26), fueled by strong loan growth and increased net interest income (NII).

The bank’s net profit reached ₹1,226 crore in Q2FY26, rising from ₹777 crore during the same period last year. NII grew 20.5% year-on-year to ₹3,059 crore, up from ₹2,538 crore in Q2FY25.

Despite regulatory rate reductions, the bank’s domestic net interest margin (NIM) expanded by 14 basis points to 3.35%, while its global NIM increased by 13 basis points to 3.21%.

For the first half of FY26, net profit climbed to ₹2,337 crore, surpassing the ₹1,410 crore recorded in H1FY25. Managing Director Ajay Kumar Srivastava emphasized that loan expansion remained central to profitability, noting that the bank’s total business crossed ₹6 lakh crore during the quarter.

Srivastava highlighted the bank’s strategic measures to maintain NIMs, including shifting accounts from repo-linked rates to MCLR pricing, optimizing portfolio quality, and dynamic deposit repricing. The share of MCLR-linked loans increased from 40% to 49% over six months.

Gross Advances

Gross advances expanded by 21% year-on-year to ₹2,77,968 crore, with retail loans surging 45%. Retail, Agriculture, and MSME (RAM) advances collectively grew 30.5%. Housing and vehicle loans drove retail growth, with increased customer interest following GST reforms.

Asset quality showed improvement as gross non-performing assets (GNPA) declined by 89 basis points to 1.83% compared to Q2FY25, while net NPAs decreased by 19 basis points to 0.28%.

The bank expanded its domestic branch network by 104 outlets to 3,373 branches, maintaining 58% presence in rural and semi-urban regions.

Published on October 16, 2025