State-owned Oriental Bank of Commerce (OBC) on Friday posted 7.8 per cent decline in net profit to Rs 326.40 crore for the October-December quarter due to increase in provisioning.
The bank had posted a net profit of Rs 354.22 crore for the October-December quarter of the previous financial year.
“The decline in net profit is due to the increased provisioning for restructured advances and Rs 30 crore provisions for expected wage revision,” Chairman and Managing Director S L Bansal said. The bank has made a provision of Rs 78 crore towards restructured assets.
Total provisions during the quarter increased to Rs 603.83 crore compared with Rs 380.86 crore a year ago.
The gross non-performing assets (NPAs) increased to 2.98 per cent from 2.92 per cent in December, 2011. Net NPAs also rose to 2.14 per cent from 1.89 per cent in the same quarter of 2011-12.
Total income of the lender rose 7.9 per cent to Rs 4,846.54 crore during the October-December period from Rs 4,491.76 crore in the same period last year. Net interest income increased 5.66 per cent to Rs 1,204 crore from Rs 1,140 crore against the same period of the previous financial year.
Net interest margin (NIM) stood at 2.84 per cent. Bansal said NIM was expected to go up to 2.95-3 per cent in the fourth quarter. He said, “The net profit is expected to see a jump of at least 15 per cent in the entire financial year. We expect to close the financial year with a net profit of Rs 1,350 crore to 1,400 crore.”
Capital adequacy ratio stood at 12.25 per cent. The bank has headroom to raise about Rs 12,000 crore from Tier-I and Tier-II bonds, he said, adding the bank would take a call on seeking capital support from the government in the second half of the next financial year. Total business as on December 31, 2012 stood at Rs 2,92,118 crore from Rs 2,67,892 crore at end of same quarter of the previous financial year, registering growth of 9.45 per cent. The bank is expecting about 15 per cent growth in both credit and deposits during the current financial year.
