New Delhi, May 19: The Oriental Bank of Commerce today reported a near 43 per cent rise in net profit at Rs 457 crore in 2002-03 and proposed 45 per cent dividend for shareholders. The seventh-largest public sector bank's total business rose by around 27 per cent to Rs 1,163 crore in 2002-03 and is expecting an over 20 per cent rise for this financial year, the bank chairman B D Narang told reporters here.
"The impressive around 43 per cent growth in net profit in the last fiscal was despite an additional provisioning of Rs 440 crore," he said, adding that the bank could have shown higher profits had it not been for higher provisioning. He said the main reasons for bettering the performance was due to cost cutting, strict control on expenses, large recoveries in NPA accounts and efficient cash management.
The cost of deposits had gone down to 7.0 per cent from 7.7 per cent, mainly due to swapping high cost deposits to the tune of Rs 2,000 crore with lower rate ones, which added to the bottomline, he said.
The cost of deposits are expected to go down to 6.4 per cent by September, he said, adding that cost to income ratio of 33 per cent was the lowest in the banking industry. Although the bank added fresh NPAs of Rs 800 crore in the last fiscal, he said higher recoveries and ploughing back the entire profits for provisioning led to net NPA to stand at 1.4 per cent from 3.1 per cent in 2001-02.
The capital adequacy ratio stood at 14.04 per cent well above the RBI stipulated nine per cent and it was 10.99 per cent in 2001-02, he said, adding, "Car is expected to be 16-17 per cent by the middle of this fiscal." Bureau Report