Indian Overseas Bank (IOB) Q2 25/26 earnings summary

Executive summary

• Net profit for Q2 FY26 reached INR 1,226 crore, up 57.79% year-on-year, with operating profit up 12.8% and net interest income up 20.53%.

• Advances grew 20.78% year-on-year, deposits increased 9.15%, and business mix rose 14.1%.

• Asset quality improved, with gross NPA at 1.83% and net NPA at 0.28%.

• Consistent profitability, robust asset quality, and prudent provisioning highlighted by management.

• Board approved unaudited financial results for Q2 and H1 FY26, with no material misstatements.

Financial highlights

• Net interest income for Q2 FY26 was INR 3,059 crore, up 20.53% YoY; net interest margin improved to 3.21%.

• Operating profit for the quarter at INR 2,400 crore, up 12.78% YoY; net profit at INR 1,226 crore, up 57.79%.

• Total income for Q2 FY26 was INR 9,214 crore, up 8.6% YoY; H1 FY26 at INR 18,081 crore.

• Cost-to-income ratio improved to 44.22% in Q2 FY26.

• Fee-based income for H1 FY26 increased 51.3% YoY to INR 1,405 crore.

Outlook and guidance

• Credit growth guidance remains at a minimum of 12%, with management expecting to achieve 17-18% for FY26.

• Focus on digital transformation, operational efficiency, and sustainable growth.

• Emphasis on expanding retail, agriculture, and MSME lending, with digital initiatives to drive engagement.

• High provision coverage and prudent risk management maintained.