InvestorQ : What should I do with my holdings in IOB, which had bought at around current price levels? Can I hold on after the latest results or should I switch to SBI?
Neelam Naik made post

What should I do with my holdings in IOB, which had bought at around current price levels? Can I hold on after the latest results or should I switch to SBI?

Answer
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Priyanka N answered.
7 months ago


Many of these stressed PSU banks can be a tricky affair. If you look at the latest results, the net loss of Indian Overseas Bank widened to Rs.6075 crore for December 2019 quarter after the bank made a provision of Rs.6664 crore towards non-performing assets and investments. This is more than thrice the provisioning made in the Dec-18 quarter and goes to underline that the stress on bank balance sheets. Total revenues were also down 10% at Rs.5198 crore and the net interest income (NII) was down to Rs.1279 crore. The net interest margins (NIM) for the bank were precariously low at 1.94%, while most of the private banks have NIMs in excess of 4%. Gross NPAs were down at 17.12% from above 25% but still unsustainably high. This stock is best avoided and I suggest you stick to the private banks or in PSUs only SBI is worthwhile.