Oriental Bank of Commerce narrows Q1 loss at Rs 3.93 bn; bad loans rise

Net NPAs or bad loans too jumped to 10.63% of the net advances

Public sector Oriental Bank of Commerce (OBC) has narrowed its net losses to Rs 3.93 billion in the first quarter ended June 30, even as bad loans increased.

The bank had reported a net loss of Rs 4.86 billion in the same period of the preceding financial year 2017-18.

Total income of the bank also fell to Rs 47.29 billion in the first quarter of 2018-19 as against Rs 52.14 billion in the same period a year earlier, the bank said in a regulatory filing.

Interest income for the period also fell to Rs 42.69 billion from Rs 44.37 billion.

The asset quality of the bank worsened with gross non-performing assets (NPAs) hitting 17.89 per cent of the gross advances as on June 30, 2018, from 14.83 per cent as on June 30, 2017.

In value terms, the gross bad loans were worth Rs 261 billion by end of the first quarter of this financial year, as against Rs 244 billion by end of June 2017.

Net NPAs or bad loans too jumped to 10.63 per cent of the net advances (Rs 142.6 billion) from 9.56 per cent (Rs 148 billion) in the year-ago period.

The return on assets (annualised) improved to (-)0.65 per cent as on June 30, 2018 from (-)0.77 per cent in the year-ago period.

The overall provisioning and contingencies for the June quarter were raised to Rs 15.39 billion from Rs 14.69 billion. However, provisioning for bad loans alone came down to Rs 12.2 billion as against Rs 15.91 billion parked aside in the year-ago period.

The bank said it was required to make additional provision in respect of select borrowal accounts covered under the provisioning of Insolvency and Bankruptcy Code (IBC).

"Accordingly, the additional provision made in respect of such borrowal accounts during the quarter ended June 30, 2018, is Rs 3.77 billion," it added.

The provision coverage ratio of the bank as on June 30, 2018, is 64.59 per cent, OBC said.

Stock of OBC traded 3.03 per cent down at Rs 71.90 on BSE.