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Oriental Bank of Commerceon Thursday reported an 80 per cent increase in net profit at Rs 302 crore (Rs 168 crore) for the quarter ended September.
A 21 per cent rise in operating profits boosted bottomline performance. Provisioning requirement for the quarter was also lower.
In the second quarter of last fiscal, there was a spurt in provisions towards non-performing assets (NPAs) as the bank had moved to system-driven NPA recognition. There is a base effect that has played to the advantage of the bank in the quarter under review, as the NPA provisioning is lower now.
Improved efficiencies on credit growth (credit deposit ratio has grown by 3 percentage points) and shedding of bulk deposits in the quarter under review helped increase operating profits.
The net profit of Rs 302 crore was, however, lower than the net profit of Rs 390 crore recorded in the first quarter this fiscal.
S.L. Bansal, Chairman and Managing Director, OBC, said that the right way to analyse the bank’s performance would be to look at it from the standpoint of operating profit.
Operating profit of Rs 921crore was higher both sequentially and on a year-on-year basis, he pointed out.
OBC’s operating profit in the first quarter this fiscal was Rs 897 crore. The bank had recorded net profit of 758 crore in the July-September quarter last fiscal.
Bansal said that the second quarter bottomline performance was lower than the first quarter primarily due to the Rs 200 crore gain realised in Q1.
“You remove that exceptional gain in first quarter (Rs 200 crore-Rs 130 crore from marked-to-market gains and Rs 70 crore from write-back of excessive provisions not required), our second quarter net profit will be substantially higher than the first quarter,” he said.
For the September quarter, there was recovery of Rs 141 crore from past technical write-off, besides treasury gain of Rs 54 crore.
Bansal said the bank was confident of achieving a net interest margin of 2.85 per cent this fiscal.
A 21 per cent rise in operating profits boosted bottomline performance. Provisioning requirement for the quarter was also lower.
In the second quarter of last fiscal, there was a spurt in provisions towards non-performing assets (NPAs) as the bank had moved to system-driven NPA recognition. There is a base effect that has played to the advantage of the bank in the quarter under review, as the NPA provisioning is lower now.
Improved efficiencies on credit growth (credit deposit ratio has grown by 3 percentage points) and shedding of bulk deposits in the quarter under review helped increase operating profits.
The net profit of Rs 302 crore was, however, lower than the net profit of Rs 390 crore recorded in the first quarter this fiscal.
S.L. Bansal, Chairman and Managing Director, OBC, said that the right way to analyse the bank’s performance would be to look at it from the standpoint of operating profit.
Operating profit of Rs 921crore was higher both sequentially and on a year-on-year basis, he pointed out.
OBC’s operating profit in the first quarter this fiscal was Rs 897 crore. The bank had recorded net profit of 758 crore in the July-September quarter last fiscal.
Bansal said that the second quarter bottomline performance was lower than the first quarter primarily due to the Rs 200 crore gain realised in Q1.
“You remove that exceptional gain in first quarter (Rs 200 crore-Rs 130 crore from marked-to-market gains and Rs 70 crore from write-back of excessive provisions not required), our second quarter net profit will be substantially higher than the first quarter,” he said.
For the September quarter, there was recovery of Rs 141 crore from past technical write-off, besides treasury gain of Rs 54 crore.
Bansal said the bank was confident of achieving a net interest margin of 2.85 per cent this fiscal.
RBI MONETARY POLICY
On expectations from the upcoming RBI monetary policy review, Bansal later told reporters that he was confident that repo rate would be cut and not Cash Reserve Ratio.
“Feel good factor is there in the market. The RBI will support it. I expect the repo rate to come down. There is liquidity in the market”. OBC’s shares surged at the National Stock Exchange on Thursday to close at Rs 314.45, up Rs 20.55 over the previous day’s close of Rs 293.90.
srivats.kr@thehindu.co.in
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