OBC Q3 net profit declines by 8% to Rs 326 crore
New Delhi: State-owned Oriental Bank of Commerce (OBC) on Friday posted 7.8 percent decline in net profit at 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 fiscal.
"The decline in net profit is due to the increased provisioning for restructured advances and Rs 30 crore provisions for expected wage revision," OBC Chairman and Managing Director S L Bansal said here.
The bank has made a provision of Rs 78 crore towards restructured assets, he added.
The total provision during the quarter increased to Rs 603.83 crore compared to Rs 380.86 crore in the same quarter a year ago.
The bank's gross NPAs increased to 2.98 percent at the end of the third quarter from 2.92 percent in December, 2011.
Its net NPAs also rose to 2.14 percent from 1.89 percent in the same quarter of 2011-12.
However, the total income of the lender rose by 7.9 percent 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 during the third quarter increased by 5.66 percent to Rs 1,204 crore from Rs 1,140 crore against same period of the previous fiscal.
The net interest margin (NIM) of the bank stood at 2.84 percent at the end of third quarter of the current fiscal.
Going forward, Bansal said, the NIM is expected to go up to 2.95-3 percent in the fourth quarter.
The net profit of the bank is expected to see a jump of at least 15 percent in the entire fiscal.
"We expect to close the fiscal with the net profit of Rs 1,350 crore to 1,400 crore," he said.
Capital Adequacy Ratio (CAR) of the bank stood at 12.25 percent at the end of third quarter.
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 fiscal.
The 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 fiscal, registering growth of 9.45 percent.
The bank is expecting about 15 percent growth in both credit and deposits during the current fiscal.