Indian Overseas Bank announced robust financial results for the third quarter of fiscal year 2026, ending December 31, 2025. The state-owned bank reported a significant 56% year-on-year increase in net profit, reaching ₹1,365 crore. This strong performance was driven by an 18% rise in net interest income and notable improvements in asset quality. The positive earnings report was released on Wednesday, January 14. ## Profit and Revenue Climb The bank's net profit for the December quarter of FY26 surged to ₹1,365 crore, a substantial jump from ₹873.6 crore recorded in the same quarter of the previous fiscal year, Q3 FY25. This represents a 56.18% year-on-year growth, marking Indian Overseas Bank's strongest quarterly performance to date. The imp^{[1][2][3][4][5]}ressive growth in profitability was underpinned by a healthy expansion in credit and improved operating metrics. For the nine months ending December 2025, the bank's cumulative net profit climbed to ₹3,703 crore, showing a 62.13% increase over the corresponding period last year. Net Inte^[2]rest Income (NII), a key measure of a bank's core earnings, also saw significant growth. It rose by 18.29% year-on-year to ₹3,299 crore in the December quarter. This increa^[2][3][5]se reflects steady growth in interest-earning assets and better margins for the bank. The operating profit for Q3 FY26 also showed a healthy increase, rising by 14.87% year-on-year to ₹2,603 crore, compared to ₹2,266 crore in Q3 FY25. This indicates ^[2][4][5]enhanced operational efficiency across the bank's operations. ### Stronger Asset Quality Indian Overseas Bank continued to show significant improvement in its asset quality. The Gross Non-Performing Assets (GNPA) ratio declined to 1.54% at the end of December 2025. This marks a substantial reduction of 101 basis points from the previous year. Similarly, the ^[2][3]Net Non-Performing Assets (NNPA) ratio improved to 0.24%. These lower NPA^[2] figures highlight a decline in stressed loans and better management of credit risk, contributing directly to the bank's improved profitability. The bank's asset quality has consistently improved, with the gross NPA ratio falling from 2.55% a year ago and 1.83% three months prior. The Provision ^[3]Coverage Ratio (PCR) also strengthened, indicating the bank's robust capacity to cover potential loan losses. Furthermore, In^[2]dian Overseas Bank proactively created an additional provision buffer of ₹1,500 crore during the quarter. This buffer is in anticipation of the expected credit loss (ECL) norms, which are set to become mandatory from April 2027. This strategic mo^[3]ve positions the bank well for future regulatory changes and potential economic fluctuations, demonstrating prudent risk management. ### Business Growth Accelerates The bank's overall business expanded considerably during the quarter. Total business grew by ₹1.01 lakh crore year-on-year, reaching ₹6.44 lakh crore as of December 2025. This represents an 18.71% growth. This expansion reflec^[2]ts increased activity across both deposits and advances. Total deposits increased by 14.5% to ₹3.49 lakh crore, while total advances rose by 24.1% to ₹2.95 lakh crore. Growth was particularly ^[2][3]strong in priority segments. Retail credit saw a significant rise of 43.04%. Agriculture loans increased by 34.51%, and lending to Micro, Small, and Medium Enterprises (MSME) was up by 17.42%. This robust growth across^[2] the Retail, Agriculture, and MSME (RAM) segments pushed overall RAM business growth to 33.1% year-on-year. The expansion in advances^[2], particularly in these key sectors, indicates a healthy demand for credit and the bank's effective outreach to various customer segments. ### Enhanced Efficiency and Returns Indian Overseas Bank also demonstrated improved efficiency and shareholder returns. The domestic Net Interest Margin (NIM) improved to 3.42% in Q3 FY26. A higher NIM indicates be^[2][3]tter profitability from the bank's core lending activities. Return on Assets (RoA) rose to 1.28%, compared to 0.93% in the same period last year. This shows the bank is ge^[2]nerating more profit from its assets. Return on Equity (RoE) also strengthened significantly, reaching 20.98%. This highlights improved returns for shareholders, reflecting effective utilization of equity capital to generate profits. These improved ratios und^[2]erscore the bank's enhanced operational efficiency and its ability to generate value for its stakeholders. The strong financial metrics across the board position Indian Overseas Bank for continued positive performance in the coming quarters. The bank's impressive Q3 FY26 results, characterized by a substantial jump in net profit, robust NII growth, and significant improvements in asset quality, reflect a strong operational and financial turnaround. This performance indicates a healthy trajectory for Indian Overseas Bank as it navigates the evolving banking landscape.

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