Sobha's profit in the first quarter of fiscal year 2026-27 grew more than threefold amid revenue growth

The public sector lender Indian Overseas Bank (IOB) reported a significant increase in net profit of 49.3 percent year-on-year on Monday. Over the three months ending in June 2026, the bank earned 1,659 crore rupees, which was attributed to an improvement in asset quality.

Quarterly Financial Performance

In the same quarter last year, the bank had recorded a net profit of 1,111 crore rupees. According to the report submitted to the stock exchange system, total income for the period from April to June increased to 10,938 crore rupees compared to 8,866.47 crore rupees the previous year.

Improvement in Asset Quality

The bank's asset quality showed positive momentum. The Gross Non-Performing Assets (GNPA) ratio decreased to 1.33 percent for the June quarter of fiscal year 27, down from 1.97 percent the previous year. Similarly, Net NPA reduced to 0.18 percent from the previous 0.32 percent.

Other Details and Market Reaction

Furthermore, provisions amounted to 834 crore rupees in the quarter under review, which remained almost unchanged compared to 844 crore rupees the previous year, although this is less than the 1,006 crore rupees recorded in the March quarter. At the time of afternoon trading, IOB shares were trading 4.11 percent higher on the BSE, reaching the mark of 35.2 rupees.

The profit of Punjab National Bank for the June quarter significantly increased, showing a growth of 214% compared to the previous year, which was due to a favorable base. Nevertheless, the bank's core operational efficiency remained mixed: the growth in net interest income was moderate, and the net interest margin was below the target set by the lender for the current fiscal year, despite improved asset quality and stable lending growth.

First Quarter Financial Results

The net profit of the Delhi-based bank reached 5,253 crore rupees in the June quarter, more than tripling compared to the previous year. However, compared to the January-March quarter, the profit grew only slightly, amounting to 5,225 crore rupees.

It is important to note that in the same period last year, the bank recorded an exceptionally low profit of 1,675 crore rupees after transitioning to a lower tax regime, which led to a one-time write-off of 3,324 crore rupees. If this one-time expense is excluded, PNB's profit growth in the first quarter of the 2027 fiscal year will be only 5% year-on-year.

Income and Marginability

The bank's Net Interest Income (NII) for the June quarter was 10,798 crore rupees, demonstrating a growth of 2% year-on-year and 4% quarterly. The bank had previously forecasted NII growth of 7% during the 2027 fiscal year, following a 2% decline in the 2026 fiscal year. The Net Interest Margin (NIM) in the June quarter was 2.5%, higher than 2.47% in the previous quarter, but lower than 2.70% in April-June 2025. This margin also did not reach the bank's target for FY27 in the range of 2.6–2.7%.

Despite this, the bank's management maintains its forecasts for NIM and NII for the year, explaining that the benefits from deposit rate revisions will become more apparent in subsequent quarters.

Lending Growth and Fund Mobilization

Lending growth remained healthy, reaching 12.7%, indicating consistent demand across all segments. However, deposit mobilization grew by only 8.5%, reflecting funding challenges faced by the banking industry.

The bank is counting on attracting deposits from foreign non-residents (FCNR(B)). Management reported that approximately $490 million has already been mobilized under the FCNR(B) scheme and expects this amount to grow to $2–2.5 billion by September 30, following the government's initiative to attract NRI deposits.

Asset Quality and Provisions

The bank's provisions for bad loans decreased to 792 crore rupees in April-June compared to 906 crore rupees in the previous quarter, but almost doubled compared to 396 crore rupees a year earlier. Furthermore, the bank created floating provisions of 390 crore rupees in preparation for the Reserve Bank of India's Expected Credit Loss norms, which will come into effect next year. As of June 30, the bank held floating provisions of 2,435 crore rupees, as stated in the announcement.

The reduction in bad loan provisions coincided with an improvement in asset quality. The Non-Performing Asset (NPA) ratio improved to 2.78% as of June 30, up from 2.95% on March 31 and 3.78% a year earlier. The Net NPA ratio also improved to 0.28% compared to 0.29% on March 31 and 0.38% at the end of June 2025.

Write-off Dynamics and Outlook

The bank's write-off ratio was 0.68% in the June quarter, lower than 0.94% at the end of March and 0.71% a year earlier. Although the write-off ratio decreased, new write-offs rose to 1,996 crore rupees in the first quarter compared to 1,792 crore rupees a year earlier. On a quarterly basis, new write-offs sharply decreased compared to 2,674 crore rupees in the fourth quarter of the 2026 fiscal year.

The results for the June quarter show that PNB's income is increasingly shifting from reducing credit risks to improvements in core banking operations. While asset quality continues to strengthen, maintaining profit growth in the remainder of FY27 will depend on the bank's ability to ensure the recovery of the margin and NII it forecasts, even amid intense competition for deposit mobilization.

The public sector bank Indian Bank, based in Chennai, announced a 10% increase in net profit for the first quarter of the current fiscal year, reaching INR 3,273 crore. In the same quarter of the previous fiscal year, the profit was INR 2,973 crore.

Quarterly Financial Performance

According to the report submitted to the regulator, the bank's total income for the June quarter of 2026-27 increased to INR 20,724 crore compared to INR 18,721 crore in the corresponding period of FY 26. Interest income also improved, amounting to INR 18,090 crore versus INR 16,283 crore a year earlier.

Net Interest Income (NII) grew by 17%, reaching INR 7,435 crore compared to INR 6,359 crore in the June quarter of FY 26. Furthermore, the bank's operating profit rose to INR 5,557 crore from INR 4,770 crore recorded in the same quarter last year.

Asset Quality and Provisions

The bank demonstrated an improvement in asset quality: Gross Non-Performing Assets (NPA) decreased to 1.86% of total loans by the end of June, down from 3.01% a year earlier. Similarly, Net NPAs, or bad loans, reduced to 0.15% compared to 0.18% in the previous year.

As a result of these changes, provisions for bad loans were reduced to INR 376 crore in the first quarter, down from INR 387 crore a year ago. The Provision Coverage Ratio (PCR) remained unchanged at 98.2% during the quarter.

Efficiency Ratios and Capital

The Return on Assets (ROA) improved to 1.34% for June 2026, whereas it was 1.03% in June 2025. Meanwhile, the bank's capital adequacy ratio decreased to 17.80% from 17.99% in the same quarter of FY 26.