Credit Rating

Ref No. IRC/112/2026-27 31.07.2026 The General Manager, The Vice President, Department of Corporate Services, National Stock Exchange Ltd., BSE Limited, Exchange Plaza, C-1 Block G, Floor 1, P.J. Towers, Dalal Street, Bandra-Kurla Complex, Bandra (E), Mumbai 400 001 Mumbai – 400 051 BSE SCRIP CODE: 532388 NSE SCRIP CODE: IOB Dear Sir/ Madam, Rating Action by CARE Ratings Rating upgraded to ‘CARE AA+/Stable’ In compliance with Regulation 30(6) and Regulation 55, read with Clause 3 of Para A of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform that CARE Ratings Limited has reviewed the ratings assigned to the Bank's Non-Convertible Securities and Certificates of Deposit. The rating details are provided below: Name of Date of Verification Credit Credit Date of ISIN Rating/ Outlook Status of Rating Rating Verification Agency (Review) Upgraded its Rating from INE565A08043 “AA” to “AA+” (Basel III Tier II CARE 30.07.2026 Verified 30.07.2026 while maintaining Bonds) the outlook as “Stable” Upgraded its Rating from INE565A08050 “AA” to “AA+” (Basel III Tier II CARE 30.07.2026 Verified 30.07.2026 while maintaining Bonds) the outlook as “Stable” Upgraded its Rating from INE565A08068 “AA” to “AA+” (Basel III Tier II CARE 30.07.2026 Verified 30.07.2026 while maintaining Bonds) the outlook as “Stable” Certificate of CARE A1+ CARE 30.07.2026 Verified 30.07.2026 Deposits Reaffirmed Indian Overseas Bank, Investor Relations Cell, Central Office, 763 Anna Salai, Chennai 600 002 044 – 7172 9791, 2888 9360 | investor@iob.bank.in We annex a copy of Press Release dated 30.07.2026 issued by CARE Ratings Limited. This is for your information and appropriate dissemination. Yours faithfully, Raghuram Mallela Deputy General Manager/ Company Secretary & Compliance Officer Indian Overseas Bank, Investor Relations Cell, Central Office, 763 Anna Salai, Chennai 600 002 044 – 7172 9791, 2888 9360 | investor@iob.bank.in Press Release Indian Overseas Bank July 30, 2026 Name of the Amount (₹ Facilities/Instruments Rating2 Rating Action Regulator1 crore) Certificate of Deposit RBI 20,000.00 CARE A1+ Reaffirmed CARE AA+; Upgraded from CARE AA; Tier-II Bonds& SEBI 2,665.00 Stable Stable Details of instruments/facilities in Annexure-1. &Tier-II bonds under Basel-III are characterised by a ‘point of non-viability’ (PONV) trigger, due to which, the investor may suffer a loss of principal. PONV will be determined by the Reserve Bank of India (RBI) and is a point at which, the bank may no longer remain a going concern on its own unless appropriate measures are taken to revive its operations, and thus, enable it to continue as a going concern. In addition, difficulties faced by a bank should be such that these are likely to result in financial losses and raising the Common Equity Tier-I (CET I) capital of the bank should be considered the most appropriate way to prevent the bank from turning non-viable. Rationale and key rating drivers The upgrade in rating assigned to the long term debt instruments of Indian Overseas Bank (IOB) factors in improvement in the bank’s financial risk profile, which is likely to sustain in the near-to-medium term, on the back of continued improvement in asset quality with moderate slippages and healthy recoveries, and better profitability. The ratings continue to favourably factor in majority ownership by Government of India (GoI), its demonstrated support in the past and expected strong continued support in future. Ratings also take into account the bank’s long track record of operations with strong presence in south India, bank’s diversified advances book and established depositor base with comfortable current account and savings account (CASA) proportion of 41.05% as on June 30, 2026.Ratings also factor in the bank’s comfortable capitalisation levels having significant cushion over minimum regulatory requirement. Going forward, with healthy capitalisation, CARE Ratings Limited (CareEdge Ratings) expects the bank’s advances to grow at a higher rate than that for the industry. However, ratings are constrained by the bank’s regional concentration. While the bank’s overall asset quality has improved, asset quality of the recently originated advances would remain a key monitorable. Rating sensitivities: Factors likely to lead to rating actions Positive factors: Factors that could individually or collectively lead to positive rating action/upgrade: • Significant improvement in the bank’s size while maintaining healthy profitability, comfortable capitalisation, and good asset quality. Negative factors: Factors that could individually or collectively lead to negative rating action/downgrade: • Dilution in government support and/or in GoI’s shareholding to below 51%. • Inability to maintain capitalisation cushion of 1% over the regulatory requirement. • Deterioration in asset quality, with net non-performing assets (NNPA) of 2.5% or more on a sustained basis. Analytical approach: Standalone, factoring in the expected support from the GoI. Outlook: Stable The stable outlook reflects CareEdge Ratings’ expectation that bank will report above-industry growth in advances while maintaining comfortable capitalisation levels and healthy profitability. Detailed description of key rating drivers Key strengths Improving profitability Net interest income (NII) increased to ₹12,574 crore in FY26 against ₹10,890 crore in FY25 in line with increase in the advances book. Non-interest income (as a percentage of total assets) stood at 1.30% in FY26 against 1.49% in FY25 aided by recovery from written-off accounts. CareEdge Ratings notes that recovery from written-off accounts contribute a significant amount to the non-interest income. The bank’s net interest margin (NIM) has fallen to 2.90% in FY26 against 2.93% in FY25 due to the recent rate cuts. Majority non-interest income has been from recoveries of written-off accounts which constituted ~35% of non-interest income. The CD ratio (net advances/ deposits) stood at 83.28% as on March 31, 2026, against 78.72% as on March 31, 2025, aided by healthy loan book growth in FY26. The bank’s operational expenses decreased to 1.88% in FY26 from 2.08% in FY25. The bank’s credit cost improved to 0.87% in FY26 from 1.12% in FY25 with reduction in slippages. Consequently, the bank’s 1SEBI: Securities and Exchange Board of India; RBI: Reserve Bank of India; MCA: Ministry of Corporate Affairs; IRDAI: Insurance Regulatory and Development Authority of India; PFRDA: Pension Fund Regulatory and Development Authority 2Complete definitions of the ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 1 CARE Ratings Ltd. Press Release return on total assets (ROTA) improvement to 1.20% in FY26 against 0.90% in FY25. However, it continues to remain moderate in comparison to the peers. The bank’s ability to improve asset quality by limiting credit cost, protecting the earnings profile, will be a key rating monitorable. In Q1FY27, IOB reported a profit after tax (PAT) of ₹1,659 crore on a total income of ₹10,938 crore against a PAT of ₹1,111 crore on a total income of ₹8,867 crore in Q1FY26. CareEdge Ratings expects the bank to sustain the profitability levels in the medium term, with credit costs remaining moderate in line with the industry. Improvement in asset quality parameters in the last five years In the last five years, bank’s asset quality parameters witnessed significant improvement supported by lower slippages, better recoveries, and higher write-offs. Gross NPA (GNPA) improved from 2.14% as on March 31, 2025, to 1.42% as on March 31, 2026, and NNPA improved from 0.37% as on March 31, 2025 to 0.21% as on March 31, 2026. CareEdge Ratings notes that the bank has written-off a portfolio amounting to ₹1,190 crore in FY26. Slippage ratio stood at 0.57% in FY26 from 1.66% in FY25. GNPA and NNPA further improved and stood at 1.33% and 0 [Showing first 8,000 characters — download PDF for full document]