Indian Overseas Bank Reports 56% Jump in Q3FY26 Net Profit at ₹1,365 Crore
Chennai: Indian Overseas Bank (IOB) continued its strong growth momentum in the third quarter of FY26, reporting its highest-ever quarterly net profit of ₹1,365 crore, marking a 56.18% year-on-year increase compared to ₹874 crore in the corresponding quarter last year.
For the nine months ended December 2025, the public sector lender posted a net profit of ₹3,703 crore, registering a robust growth of 62.13% year-on-year.
Profitability and Income Growth
The bank’s operating profit rose by 14.87% year-on-year to ₹2,603 crore in Q3FY26, while net interest income (NII) increased by 18.29% to ₹3,299 crore. For the nine-month period, NII stood at ₹9,104 crore, up 17.20%.
Domestic net interest margin (NIM) improved to 3.42%, compared to 3.35% in Q2FY26, while return on assets (ROA) strengthened to 1.28%, up from 0.93% a year ago. The cost-to-income ratio stood at 45.74%.
Strong Business Growth
As of December 2025, the bank’s total business increased by ₹1.01 lakh crore to ₹6.44 lakh crore, registering a year-on-year growth of 18.7%.
Deposits grew 14.5% to ₹3.49 lakh crore, while CASA deposits rose 7.8% to ₹1.43 lakh crore, with domestic and global CASA ratios at 41.29% and 40.85%, respectively.
Retail Term Deposits increased 16.3% to ₹1.75 lakh crore.
On the lending side, total advances grew 24.1% to ₹2.95 lakh crore, led by strong growth in the Retail, Agriculture, and MSME (RAM) segments. Retail credit surged 43.04%, agriculture credit rose 34.51%, and MSME credit increased 17.42%, resulting in overall RAM business growth of 33.1% year-on-year.
Improved Asset Quality
IOB reported further improvement in asset quality, with the gross NPA ratio declining to 1.54%, down 101 basis points year-on-year, while net NPA reduced to 0.24%, a decline of 18 basis points.
The slippage ratio improved to 0.11%, while the provision coverage ratio (PCR) strengthened to 97.49%. Credit cost for the quarter declined to 0.44%, down 26 basis points year-on-year.
Robust Recovery and Capital Position
Total NPA recovery during Q3FY26 stood at ₹890 crore, with ₹635 crore recovered from written-off accounts. Recoveries continued to significantly outpace slippages, with cumulative recoveries of ₹2,616 crore during the first nine months of FY26, compared to slippages of ₹845 crore.
The bank’s capital adequacy ratio (CAR) stood at 16.30% as of December 2025, with Tier-I capital at 13.99% and Tier-II capital at 2.30%.
Network Expansion
Strengthening its pan-India presence, Indian Overseas Bank added 116 branches over the past year, taking its total branch network to 3,438 as of December 2025. Of these, 58% are located in rural and semi-urban areas.
The bank also expanded its ATM/CR network to 3,622, increased the number of business correspondents to 11,959, and raised its total customer touchpoints to 19,019.
With strong profitability, improving asset quality, and steady business expansion, Indian Overseas Bank reaffirmed its position as one of the fastest-growing public sector banks in Q3FY26.
