Indian Overseas Bank (IOB) is currently the top loser on the BSE. It hit a record of sorts today – it was at a new 52-weel low at Rs.29.55 and this was after it had breached the lower circuit at Rs31.50. Volumes are up over 11 times. Currently the stock is down 13% at Rs.30.50, making one wonder if it would hit another new low during the day.

The Bank posted very disturbing numbers for Q2FY16. It reported a net loss of Rs.551 crore v/s  loss of Rs.245 crore in previous Q2. Its H1FY16 loss now stands at Rs.536 crore v/s profit of Rs.26 crore in H1FY15. The Bank has stated that higher provisioning was the main reason behind the loss.  Provisioning was at Rs.1558 for the current Q2 compared to Rs.663 crore in Q1 and Rs.892 for Q2FY15.

And there has been deterioration in asset quality too. Gross NPA for the quarter was at 11% v/s 9.4% in Q1 and Net NPA was at 7.41% v/s 6.31%.

In a way, these numbers should not come as a surprise at all as RBI on 6^th Oct had ordered the Bank to take prompt corrective action as its CAR fell below 9%, Net NPA surged over 10% and RoA had slipped below 0.25%.

That’s not all. Global ratings agency Standard & Poor's (S&P) had recently assigned Indian Overseas Bank (IOB) a rating of 'BB+', a notch below investment grade, with stable outlook. The rating agency expects the bank's credit costs to remain high because of the bank's weak asset quality, adding that it relies on large capital infusions on an ongoing basis to support its growth because its retained earnings are low.

Rating agency ICRA had also revised its rating due to continued deterioration in asset quality which has affected the solvency and profitability in FY15 and Q1FY16.