IOB's Strategic Move to Enhance Asset Quality

In a significant step towards financial recovery, Indian Overseas Bank (IOB) announced the sale of 46 non-performing asset (NPA) accounts, totaling a staggering Rs 11,500 crore. This move comes as part of the bank's ongoing efforts to cleanse its balance sheet and improve asset quality, following a similar sale of 91 NPA loans last year.

Focus on Robust Recovery Measures

IOB's Managing Director and CEO, Ajay Kumar Srivastava, emphasized the bank's commitment to maximizing value through effective recovery strategies. These include SARFAESI actions, compromise settlements, and sales to asset reconstruction companies (ARCs). The bank is also considering the sale of MSME and educational loan portfolios to ARCs, aligning with its strategy to enhance recovery outcomes.

Significant Reduction in NPA Ratios

Over the past few years, IOB has made remarkable progress in reducing its gross and net NPA ratios. From 11.69% in March 2021, the gross NPA ratio has plummeted to 2.72% by September 2024. Similarly, the net NPA ratio saw a decline from 3.58% to 0.47% in the same period, showcasing the bank's effective management of non-performing assets.