OBC bottom line marginally up

BS 200 SCORECARD

Oriental Bank of Commerce's net profit for the quarter ended March 2006 was Rs 204.94 crore, marginally higher than the previous corresponding quarter's Rs 202.96 crore.

At a press conference on Saturday, K N Prithviraj, chairman and managing director, announced the governing board has recommended a dividend of Rs 4.50 on each share.

Operating profit in the quarter ended March 2006 dropped on account of a sharp rise in interest expense. The operating profit for the quarter was Rs 282.28 crore, 18 per cent lower than the previous year's Rs 343.95 crore.

Total income for the quarter was Rs 1,233.54 crore, 10.3 per cent higher than the previous year's Rs 1,117.77 crore. For the same period the interest expense was Rs 671.72 crore, 21 per cent higher over the previous year's Rs 555.43 crore.

The bank plans to step up efforts to raise deposits this year to keep its interest cost under check in a year when its advances are expected to grow by 20 per cent.

The bank plans to open 63 branches to add to its existing network of 1,148 branches. OBC plans to grow its deposits by 17 per cent this year compared with 4.9 per cent growth seen in 2004-05. In absolute terms deposits stood at Rs 50,197 crore at the end of 2005-06.

The bank's operating profit was adversely affected in 2005-06 because it had resorted to relatively more expensive bulk borrowings from institutions to provide the means to support 29.2 per cent growth in gross advances to Rs 35,549 crore.

For the financial year 2005-06 the company's net profit was Rs 557.16 crore, 23.2 per cent lower than the previous year's Rs 726.07 crore.