Are IOB shares a good pick?
Indian Overseas Bank is a central Indian government-owned bank owning roughly 3,400 domestic branches, six overseas branches, and one representative office.IOB is the first bank to enter consumer lending and launch a Personal Loan program. It was one of the 14 large banks that the Indian government nationalised. The bank has a history of developing its software requirements through its internal IT department.
A dedicated IT development team within the bank created the lightest CLI-based Core Banking Solution, accounting for over 80% of the software products utilised by the organisation.With Universal Sompo General Insurance Company Limited and its 19% equity stake, along with Allahabad Bank, Dabur Investments, and Karnataka Bank, IOB entered the Non-Life Insurance market.
For the benefit of its devoted clients, the bank has partnered with Apollo Munich Health Insurance to offer specialist Health and Personal Accident Insurance.The IOB share price at the time of writing the article is Rs. 17.50, and its market capitalisation stands at Rs. 33,079.22 crore. Should you consider buying an IOB share, here are some highlights about them:
- IOB declared its Q4FY22 quarterly results:
- The Net Profit for the Fiscal Year 2021–2022 increased from Rs. 831 crore (as of March 31, 2021) to Rs. 1,709 crore (31.03.2021)
- Compared to the quarter that ended on December 31, 2021, the profit for the quarter that ended on March 31, 2022, was Rs. 552 crore.
- The current level of Net NPA is 2.65%, which complies with the RBI requirements.
- Gross Non-Performing Assets decreased by Rs. 122 croreduring the quarter. GNPA ratios dropped from 10.40% to 9.82%. QoQ
- The ratio of provision coverage increased to 91.66%.
- The bank has seen an increase in its earnings per share.
- Additionally, there has been an effective use of shareholder funds, leading to an increase in return on equity in the last two years.
- Furthermore, the bank has effectively used its assets to generate profits and has seen its asset return improve in the last two years.
Besides theIOB share strength, there are a few negatives as well:
- The bank has seen declining net cash flow, making businesses unable to produce net cash.
- IOB witnessed a decline in net profit with a falling profit margin.
Before choosing a banking share, remember that the bank does not have increasing non-performing assets and has positive provision coverage, showing that the bank has funds to cover up the losses due to bad debts. On these aspects, IOB share price can be a good pick and considered a good investment.
Investments are subjected to market risks, and investors should consider these aspects before deciding.IOB share can be considered for investment purposes only after counting all aspects, positives and negatives.