Custom Search

Sunday, August 4, 2013

Oriental Bank net profit down 9.7% in Q1

Oriental Bank of Commerce (OBC) has sought capital support of Rs 1,600 crore from the Centre to fund its business growth, S.L.Bansal, Chairman and Managing Director, said.

The bank expects this fund infusion out of the Rs 14,000 crore allocated in this year’s Budget for capital infusion in various public sector banks.

The previous occasion the Government infused capital in OBC was in March 2011 and the amount involved was Rs 1,740 crore, Bansal said.

OBC on Saturday reported a 9.7 per cent decline in net profit for the first quarter ended June 30, 2013 at Rs 353.38 crore (Rs 391.42 crore).

Total income for the quarter under review increased 11.93 per cent to Rs 5,255.70 crore (Rs 4,695.57 crore).

The bank’s bottomline performance was weighed down by provision towards non-performing loans and taxes despite an increase in operating profits.

Its financial performance was bolstered by a sharp rise in trading profits from the treasury at Rs 205.57 crore (- Rs 13.34 crore).

Bansal said it would be difficult to give any specific profit guidance for the second quarter. India is no longer working in a closed economy set-up and economic events in developed world are impacting domestic market conditions, he added.

Bansal, however, said the bank would look to achieve net interest margin of 2.9-3 per cent in the second quarter.

He also made it clear that there was no question of reducing the base rate for now. The bank is unlikely to look at any base rate reduction until the Reserve Bank of India’s recent liquidity reduction measures are reversed, V. Kannan, Executive Director, said.

“We are going to continue with the base rate of 10.25 per cent. The question of increasing the base rate is certainly not on the radar”, Bansal said.

As for non-performing assets, there has been a write-off to the extent of Rs 260 crore during the quarter under review.

This is substantially lower than Rs 480 crore written-off in the same quarter last fiscal, said Bhupinder Nayyar, Executive Director, OBC.

The total slippages (bad loans) for the June quarter were Rs 764 crore (Rs 706 crore).

Total recoveries stood at Rs 480 crore (Rs 437 crore).

OBC has this quarter recognised Winsome Diamonds as a non-performing asset.

The bank has an exposure of Rs 140 crore towards this company and has now provided 50 per cent toward doubtful debt, Bansal said.

Source: thehindubusinessline


Post a Comment

Popular Posts

Desi Google | A2Z Famous Quotes | What's Cooking America | Joke Site