As a percentage of total advances, gross non-performing assets (NPAs) of the public sector bank went up to 5.7 per cent in the quarter ended September 30 versus 4.7 per cent in the corresponding quarter last year. However, asset quality improved on a sequential basis with the NPA share reducing from 5.85 per cent of the gross advances in the previous quarter.
The provisioning for bad loans and contingencies fell to Rs 569 crore, down from Rs 641 crore made by it in the same quarter in the last financial year.
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Animesh Chauhan, managing director and chief executive officer of the public sector bank, said the stress levels in some sectors have come down. "The roads sector has seen good improvement though stress in steel and power sector continues. But if the economy keeps improving, the stress levels should come down. Also, if credit growth improves, the denominator will increase and the gross bad debts ratio should come down," he said.
Credit growth was up 6.97 per cent in the quarter under review. Chauhan said credit growth should improve further to double digits by the end of this financial year if credit demand from the corporate sector picks up in the fourth quarter.
The net interest margin, the difference between the interest income generated by banks and the amount of interest paid out to their lenders, stood at 2.76 per cent, up from 2.63 per cent a year ago.
Net interest income, which is the difference between interest earned and interest given, grew 11 per cent to Rs 1,383.05 crore on an annual basis.
The lender saw loan book growth of six per cent, even as it targets a 12 per cent growth for the full financial year.
The results announcement saw OBC shares close 9 per cent higher at Rs 145.85 on the BSE.
Tax expenses for the quarter were Rs 121.76 crore against a writeback of Rs 77.7 crore in the year-ago period.