Indian Overseas Bank Gets Another Tax Refund Order

Indian Overseas Bank (IOB), a public sector lender, has received a tax refund order amounting to ₹808 crore for the assessment year 2013-14. According to the bank’s exchange filing yesterday, this amount includes interest under Section 244A of the Income Tax Act. The order, dated July 7, 2024, was shared with the bank through the income tax portal.

This is the second refund order the bank has received this week. On Tuesday, IOB announced it had been granted a refund of ₹1,359 crore, including interest, for the assessment year 2015-16. That order, dated August 17, 2024, was also accessed via the income tax portal.

In November, the lender reported another tax refund of ₹1,238 crore for the assessment year 2019-20. This was preceded by a smaller refund of ₹123.8 crore in September 2024.

Financial Performance

IOB’s standalone net profit for Q2 FY25 rose 24.4% year-on-year to ₹777 crore, up from ₹625 crore in the corresponding quarter of FY24. The lender’s net interest income (NII) also increased by 8.2%, reaching ₹2,538 crore for the quarter, compared to ₹2,346 crore in Q2 FY24.

Asset quality showed signs of improvement, with gross non-performing assets (NPAs) reduced to 2.72% in Q2 FY25, compared to 2.89% in Q1 FY25. Net NPAs also declined, standing at 0.475% in the latest quarter, compared to 0.51% in the previous quarter.

Market Reaction

Following the announcement of the ₹1,359 crore refund, IOB’s shares climbed 4.7% to ₹59.50. Currently, Indian Overseas Bank’s stock is trading at ₹57.30, down by 0.61% (₹0.35) for the day at around 1 PM, marking a year-to-date gain of 31.42% and a 32.64% rise over the past year.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.