OBC slips after dismal Q3 numbers

Oriental Bank of Commerce fell 7.65% to Rs 289.05 at 12:32 IST on BSE after net profit slumped 91.27% to Rs 19.56 crore on 7.79% growth in total income to Rs 5458.79 crore in Q3 December 2014 over Q3 December 2013.

The Q3 result was announced during market hours today, 29 January 2015.

Meanwhile, the S&P BSE Sensex was down 77.34 points or 0.26% at 29,481.84.

On BSE, so far 4.85 lakh shares were traded in the counter as against average daily volume of 1.98 lakh shares in the past one quarter.

The stock hit a high of Rs 315 and a low of Rs 288.60 so far during the day. The stock hit a 52-week low of Rs 160.50 on 14 February 2014. The stock had hit a 52-week high of Rs 377.30 on 29 May 2014.

The stock had underperformed the market over the past one month till 28 January 2015, declining 8% compared with the Sensex's 8.51% rise. The scrip had, however, outperformed the market in past one quarter, surging 12.25% as against Sensex's 9.96% rise.

The mid-cap company has equity capital of Rs 299.85 crore. Face value per share is Rs 10.

The sharp slump in Oriental Bank of Commerce's (OBC) net profit during the quarter was due to exceptional expenditure of Rs 137.38 crore in Q3 December 2014.

OBC said that it has sold financial assets for a consideration of Rs 195.20 crore to asset reconstruction companies on cash and security receipts basis during the half year ended 30 September 2014 and booked a gain of Rs 146.08 crore the difference between aggregate consideration and aggregate value (net of provisions). During the course of discussions on draft preliminary risk assessment report 2013-14, the Reserve Bank of India (RBI) observed that only cash component of the sale consideration is eligible to be booked as profit. Based on observation of RBI, bank has reduced the book value of security receipts by Rs 137.38 crore during Q3 December 2014, OBC said.

OBC's ratio of gross non-performing assets (NPAs) to gross advances stood at 5.43% as on 31 December 2014 compared with 4.74% as on 30 September 2014 and 3.87% as on 31 December 2013. The ratio of net NPAs to net advances stood at 3.68% as on 31 December 2014 compared with 3.29% as on 30 September 2014 and 2.91% as on 31 December 2013.

The bank's provisions and contingencies jumped 57.75% to Rs 885.14 crore in Q3 December 2014 over Q3 December 2013. Provision coverage ratio as at 31 December 2014 stood at 57.39%.

OBC's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 11.26% as on 31 December 2014 as against 10.88% as on 30 September 2014 and 11% as on 31 December 2013.

The Government of India (GoI) held 59.13% stake in OBC (as per the shareholding pattern as on 31 December 2014).

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