OBC net profit drops 10%

Total income increased 11.93% to Rs 5,255.70 crore from Rs 4,695.5 crore in the corresponding year-ago period

Oriental Bank of Commerce (OBC) on Saturday reported a 9.7 per cent decline in net profit at Rs 353.38 crore for the quarter ended June 2013, on account of higher provisioning. The bank had posted a net profit of Rs 391.42 crore in the corresponding period last year. Total income increased 11.93 per cent to Rs 5,255.70 crore from Rs 4,695.5 crore in the year-ago period, said Chairman and Managing Director S L Bansal.

Provisions rose to Rs 734.89 crore against Rs 505.12 crore in the same period of the previous fiscal. Gross non-performing assets (NPAs) as a percentage of total advances rose to 3.36 per cent from 2.97 per cent. Net NPAs went up to 2.34 per cent from 2.05 per cent.

Net interest income rose 16.09 per cent to Rs 1,307 crore, compared with Rs 1,126 crore in the same period a year ago. The bank's net interest margin declined to 2.9 per cent at the end of the first quarter from 2.79 per cent in June 2012.

The bank had a capital adequacy ratio of 12.02 per cent at the end of June.

Total business as of June 30 stood at Rs 3,04,269 crore from Rs 2,72,048 crore at end of the first quarter in the previous fiscal, a growth of 11.84 per cent.

The bank recorded a credit growth of 12.38 per cent to Rs 1.27 lakh crore, while deposits grew 11.4 per cent Rs 1.76 lakh crore at the end of the first quarter.

The bank expects credit and deposit growth of 13-14 per cent during the entire fiscal, Bansal said.

Asked about raising lending rates in the backdrop of measures taken by the Reserve Bank of India, Bansal said there is no plan at the moment and the bank would take a call on it after 20-25 days.

The bank plans to open 125-150 branches across the country to increase its network, which is currently at about 2,000.