Indian Overseas Bank Analyst Conference Call Summary
Date and Participants
• Date: July 22, 2024
• Moderator: Aryan Rana, Veritas Reputation
• Key Management: MD and CEO Ajay Kumar Srivastava
Financial Highlights for Q1 FY 2025
• Total Business: Rs. 5,28,773 crores (16% YoY increase)
• CASA Deposits: 7.93% growth
• Gross Advances: 20.30% increase
• Net Profit: Rs. 633 crores (26.47% YoY increase)
• Capital Adequacy Ratio: Improved to 17.82%
• Gross NPA Ratio: Decreased to 2.89%
Q&A Session Insights
• Operating Profit Decline:
• Concerns raised by Ashok Ajmera regarding quarter-on-quarter decline.
• Srivastava attributed it to delays in NPA auctions, confident in future recovery.
• Other Income Concerns:
• Ajmera inquired about the drop in "other income" and accounting changes.
• Srivastava confirmed no significant impact on profit and loss.
• Medium Enterprises Growth:
• Notable 74.81% increase explained by low base and aggressive TReDS growth.
• Credit Growth Projection:
• Target set at 13% to 14% for the financial year.
Deposit Structure and Borrowings
• Retail Deposits:
• Stable base with minimal reliance on bulk deposits.
• Borrowings Increase:
• 9% YoY increase attributed to market deposit scarcity.
• Growth guidance of 11% to 12% for deposits in FY 2025.
Contingent Liabilities and Agricultural Loan Waivers
• Contingent Liabilities:
• Totaling Rs. 8,450 crores (income taxes) and Rs. 1,146 crores (indirect taxes).
• Srivastava reassured that these are common and appeals are filed.
• Agricultural Loan Waivers:
• Srivastava noted the bank is prepared for potential impacts from waivers.
Conclusion
• Credit-Deposit Ratio: Aiming for 76% to 77%.
• Growth Commitment: Strong focus on achieving growth targets for credit and deposits.
• Overall Sentiment: Positive remarks about the bank's growth trajectory.

Meeting Overview
• Date: May 29, 2024
• Event: Completion of Analyst Meet on May 24, 2024
• Attendees: Key management personnel including MD & CEO, Executive Directors, CFO
• Availability: Transcript published on the bank's website
• Compliance: Adheres to SEBI regulations for investor meetings
Financial Performance Highlights
• Market Capitalization: Increased by 175% in one year; 800% over five years, reaching Rs 1,26,000 crore
• Total Business: Surpassed Rs 5 lakh crore as of March 31, 2024
• Deposits: Grew by 9.59% to Rs 2.86 lakh crore
• Gross Advances: Increased by 15.88% to Rs 2.19 lakh crore
• Net Profit: Rose to Rs 2,656 crore, a 26.54% increase
• Key Ratios:
• Provision Coverage Ratio: 96.85%
• Capital Adequacy Ratio: 17.28%
• Reduction in Gross Non-Performing Advances: 51.72%
Operational Efficiency Improvements
• Slippage Ratio: Decreased from 2.87% to 0.87%
• Credit Risk Weight Ratio: Reduced to 54.05%
• CET1 Capital Ratio: Improved to 14.47%
• Profitability Metrics: Enhanced return on equity and earnings per share
Retail Banking Growth
• Segments: Growth in agriculture, MSME, and personal loans
• Digital Initiatives: Advancements in technology and customer service, including core banking solutions and mobile banking enhancements
• Awards: Recognition for technological advancements and digital financial inclusion
Management Insights
• Market Cap Growth: Noted by Ashok Ajmera, with questions on sustainability of income and costs
• Credit Growth Target: Confirmed at 13% for 2024-25
• Capital Requirements: Current capital deemed sufficient; planned Rs 5,000 crore fundraising
• Recovery Strategies: Target of Rs 6,000 crore from recoveries, primarily from technically written-off accounts
Future Plans and Challenges
• Digital Infrastructure Spending: Increase from Rs 1,100 crores to Rs 1,650 crores
• Asset Mix Focus: Targeting 65-66% for RAM (Retail, Agriculture, MSME) and 34-35% for corporate loans
• Treasury Operations: Plans to capitalize on market opportunities
• Tax Liabilities: Ongoing disputes regarding ₹5,000-6,000 crores, currently sub judice
Conclusion
• Outlook: Management emphasizes commitment to growth, operational efficiency, and enhancing shareholder value.