Chennai, Jun 14 (IANS): City based Indian Overseas Bank (IOB) plans to raise additional funds from a follow-on equity issue and Rs.1,000 crore by issue of bond.

The bank closed last fiscal with a net profit of Rs.831 crore as against a net loss of about Rs.8,527 crore.

The total income for the year ended 31.03.2021 stands at Rs.22,525 crore as against Rs.20,766 crore for FY20.

In a regulatory filing on Monday, IOB said its Board has approved the issue of 125 crore equity shares at an appropriate premium to the public by way of follow- on public offer/rights issue with or without participation of Government of India.

The Board also decided that the issue could also be to qualified institutional buyers, employee shareholders, issue on preferential basis to insurers and mutual funds.

The bank Board also approved the issue of Basel III compliant tier II bonds up to Rs.1,000 crore in one or more tranches on private placement or public issue.

On 31.03.2021, IOB had received Rs.4,100 crores as capital infusion by the Government of India at an issue price of Rs.16.63 per equity share of Rs.10 each.

According to IOB, it plans to come out of Prompt Corrective Action by focusing on loan recovery, low cost deposits and less capital consuming advances.

During the year under review IOB's total business stood at Rs.3,79,885 crore (deposits Rs 2,40,288 crore, advances Rs.1,39,597 crore) up from Rs.3,57,723 crore (deposits Rs.2,22,952 crore, advances Rs. 1,34,771 crore).

The bank said it had recovered about Rs.6,831 crore from non-performing assets (NPA) accounts last fiscal.

The bank's gross NPA reduced from 14.78 per cent as at March 31, 2020 to 11.69 per cent as at 31.3.2021.

The net NPA went down from 5.44 per cent as at 31.3.202 to 3.58 per cent as at 31.3.2021.