Indian Overseas Bank Q3 FY26 Results Net Profit Jumps 56% to Rs 1365 Crore

Indian Overseas Bank (IOB) delivered its strongest quarterly performance to date, reporting an all-time high net profit of Rs 1,365 crore for the third quarter of FY26, reflecting a 56.18 percent year-on-year growth. The sharp rise in profitability was supported by robust credit expansion, improved asset quality and strong operating metrics.

For the nine months ended December 2025, the bank’s net profit surged to Rs 3,703 crore, registering a growth of 62.13 percent over the same period last year.

Strong Operating Performance

Operating profit for Q3 FY26 increased to Rs 2,603 crore, up 14.87 percent from Rs 2,266 crore in Q3 FY25. Net Interest Income climbed 18.29 percent year-on-year to Rs 3,299 crore, reflecting steady growth in interest-earning assets and improved margins.

The bank’s domestic Net Interest Margin improved to 3.42 percent in Q3 FY26, while Return on Assets rose to 1.28 percent, compared to 0.93 percent a year earlier. Return on Equity also strengthened to 20.98 percent, highlighting improved shareholder returns.

Business Growth Accelerates

IOB’s total business expanded by Rs 1.01 lakh crore year-on-year to reach Rs 6.44 lakh crore as of December 2025, marking a growth of 18.71 percent.

Total deposits increased 14.5 percent to Rs 3.49 lakh crore, while total advances rose 24.1 percent to Rs 2.95 lakh crore. Retail Term Deposits grew 16.3 percent to Rs 1.75 lakh crore, and CASA deposits climbed 7.8 percent to Rs 1.43 lakh crore.

The bank reported strong expansion in priority segments with Retail credit rising 43.04 percent, Agriculture loans increasing 34.51 percent, and MSME lending up 17.42 percent, pushing overall RAM business growth to 33.1 percent year-on-year.

Asset Quality Reaches New Lows

IOB’s asset quality continued to improve significantly. The Gross NPA ratio declined to 1.54 percent, down 101 basis points from last year, while Net NPA reduced to 0.24 percent. The Provision Coverage Ratio improved to 97.49 percent, and credit cost declined to 0.44 percent, reflecting prudent risk management.

Recoveries remained strong with Rs 890 crore recovered in Q3 FY26 alone and Rs 2,616 crore recovered in the first nine months of FY26, significantly exceeding fresh slippages.

Capital Position and Network Expansion

The bank’s Capital Adequacy Ratio stood at 16.30 percent, with Tier-I capital at 13.99 percent and Tier-II at 2.30 percent, providing a solid buffer for future growth.

IOB continued expanding its physical footprint, adding 116 new branches over the past year, taking the total to 3,438 branches, with 58 percent located in rural and semi-urban regions. The ATM and cash recycler network increased to 3,622, and total customer touchpoints crossed 19,000 nationwide.

Outlook

The Q3 FY26 results reinforce Indian Overseas Bank’s sustained turnaround momentum, driven by disciplined lending, stronger recoveries, expanding business volumes and enhanced customer reach. With balance sheet strength and improving profitability, IOB remains well positioned for consistent growth in the coming quarters.