Indian Overseas Bank reported net interest income of 8% growth to Rs 656 crore was slightly below expectations. Advances grew by a healthy 24% to Rs 54,621 crore and deposits registered a higher 33% growth to Rs 78,791 crore. A dip in NIM to 3.3% from 3.9% was on account of higher cost of funds as a result of falling CASA to 31% from highs of 36% a year ago. This led to low NII growth. However, surprise came from other income which grew 63% y-o-y to Rs.219.5 crore. Fee income grew 29% and trading gains were up 39%. Expect net interest income and non-interest income to grow at 18% and 19% respectively over FY07-09E.
PAT grew a healthy 24.5% to Rs 308.1 crore from Rs 246.8 crore in the corresponding quarter the previous year on account of a reversal in investment depreciation (change in method of amortization) resulting in overall provision coming down by 40% y-o-y for the quarter.