OBC net marginally down at Rs 354 cr

New Delhi: State-owned Oriental Bank of Commerce (OBC) today reported a marginal decline of 2.4 per cent in its net profit at Rs 354.7 crore for the first quarter ended June 2011, due to rise in provisions and contingencies.

The bank had posted a net profit of Rs 363.3 crore in the same quarter an year ago.

At the same time, operating profit of the bank also declined by 2.55 per cent at Rs 801.3 crore as compared to Rs 822.32 crore in the April-June quarter of the previous fiscal.

During the period under review, the net interest income declined by 3.69 per cent to Rs 1,018 crore, compared to Rs 1,057 crore in the same period an year ago.

However, provisions and contingencies of the bank increased to Rs 314.2 crore during the quarter as against Rs 227.9 crore in the same quarter last year.

The total income rose by 28.7 per cent to Rs 3,920 crore for the first quarter ended June 30, from Rs 3,046 crore in the same period previous fiscal.

The net interest margin (NIM) of the bank declined to 2.94 per cent, OBC Chairman and Managing Director Nagesh Paydah told reporters here.

“We will try and maintain NIM at 3 per cent during the fiscal,” he said, adding, the cost of fund may soften when deposits go in for repricing later during the year.

Interest rates are expected to soften after September as rates have almost peaked, he said.

The bank expects credit growth of 20 per cent while deposits are likely to grow at 19 per cent during the current fiscal, he said.

Total business of the bank as on June 30, stood at Rs 2,42770 crore from Rs 2,09,156 crore at end of first quarter of previous fiscal, registering growth of 16.07 per cent.

As far as asset quality of the bank is concerned, the gross NPAs as a percentage to total advances rose to 2.07 per cent from 1.74 per cent in the same quarter an year ago.

Its net NPAs also went up to 1.09 per cent during the three-month period from 0.72 per cent during the first quarter of 2010-11.

Capital Adequacy Ratio (CAR) of the bank stood at 13.6 per cent at the end of June, 2011.

The bank has no plans to raise capital to meet the business growth plan in the near future, he said, adding, the bank although has a headroom of Rs 6,000 crore under Tier-II.

Source: Financial Express