Indian Overseas Bank Q1 FY27 profit rises 49% YoY

Results at a glance

Indian Overseas Bank (IOB) reported an all-time high quarterly net profit for Q1 FY27, supported by higher net interest income and a jump in non-interest income. The state-owned lender disclosed the results on July 20, 2026, for the quarter ended June 30, 2026.

Net profit rose 49.32% year-on-year (YoY) to ₹1,659.24 crore, compared with ₹1,111.04 crore in Q1 FY26. Sequentially, profit increased 10.21% to 10.23% from ₹1,505.45 crore in Q4 FY26, depending on the source cited alongside the results.

Net profit hits record, operating profit grows

IOB’s pre-provision operating profit (also reported as operating profit in parts of the commentary) came in at ₹2,693.10 crore, up 14.21% YoY from ₹2,357.95 crore. On a quarter-on-quarter basis, PPOP rose 1.05% from ₹2,665.05 crore.

The bank also reported profit before tax of ₹1,859 crore for Q1 FY27, up 22.80% YoY from ₹1,514 crore in Q1 FY26.

Total income rises 23% YoY

Total income for the quarter increased 23.36% YoY to ₹10,937.80 crore from ₹8,866.47 crore in Q1 FY26. Compared with ₹9,779.87 crore in Q4 FY26, total income rose 11.84%.

Interest earned was reported at ₹8,777.57 crore, a YoY increase of 18.86%. Interest on advances stood at ₹6,662.36 crore versus ₹5,509.10 crore in the corresponding quarter last year.

Net interest income and margins strengthen

Net interest income (NII) rose 34.28% to 34.30% YoY to about ₹3,688 crore (reported as ₹3,687.62 crore in one set of highlights). The bank attributed the performance to continued moderation in the cost of deposits, which eased to 4.70% from 5.10% a year earlier.

Net interest margin (NIM) was reported at 3.37% for Q1 FY27, up 33 basis points YoY, with a 12-basis-point improvement over Q4 FY26 (3.25%). Separately, domestic NIM was reported at 3.48% as on June 30, 2026, up 31 basis points YoY.

Non-interest income jumps, PSLC commission stands out

Non-interest income increased 45.85% YoY to ₹2,160 crore in Q1 FY27. The rise was led by a more than threefold increase in priority sector lending certificate (PSLC) commission income to ₹863 crore.

A results note also highlighted that other income formed a large share of profit before tax, flagging the importance of tracking the mix of earnings going ahead.

Asset quality improves further

IOB reported a continuing improvement in asset quality in Q1 FY27. Gross NPA ratio declined to 1.33% from 1.97% a year earlier, a 64-basis-point reduction. Net NPA eased to 0.18% from 0.32% in the year-ago period.

Slippage-related metrics also improved in the quarter, with total slippages at ₹195 crore and a slippage ratio at 0.06%, described as a historic low.

Provisions, recoveries, and provision coverage

Provisions for Q1 FY27 were ₹834 crore, largely unchanged from ₹844 crore in Q1 FY26, and lower than ₹1,006 crore in Q4 FY26. Another update alongside the results stated provisions declined 1.19% YoY to ₹834 crore.

Total NPA recovery was reported at ₹654 crore during the quarter, stated as 3.35 times the quarterly slippages. Provision coverage ratio (PCR) stood at 97.67%, up by 20 basis points.

Balance sheet growth: deposits and advances

The bank reported total business of ₹698,325 crore, up 17.72% YoY. Total deposits rose 13.72% YoY to ₹376,193 crore.

Total advances, also referred to as total credit, increased 22.75% YoY to ₹322,132 crore, indicating continued momentum in the loan book during the quarter.

Key numbers table

Profitability ratios and EPS

Profitability ratios strengthened during the quarter. Return on equity (ROE) was reported at 22.69% compared with 19% in June 2025. Return on assets (ROA) increased to 1.41%.

Earnings per share (EPS) rose to ₹0.86 from ₹0.58 in Q1 FY26, and was also higher than ₹0.78 in Q4 FY26.

Market reaction and what investors tracked

Following the results, IOB shares were reported trading higher by about 3.5% to 3.9% near ₹35 on the BSE. The market response tracked the combination of record quarterly profit, faster NII growth, and improving asset quality indicators.

At the same time, investors also watched the operating profit margin, which was reported at 24.62%, lower than 26.59% in Q1 FY26 and 27.25% in Q4 FY26.

Earnings call and next checkpoints

IOB’s management discussed the Q1 FY27 performance in an earnings conference call dated July 20, 2026. The transcript is referenced as available in full for readers seeking detailed management commentary.

Near-term focus areas from the disclosed metrics remain NII momentum, the durability of non-interest income, and maintaining low slippages alongside strong provision coverage.