Oriental Bank net up 51% at Rs 250 crore

Oriental Bank of Commerce (OBC) on Monday reported a 50.97 per cent increase in net profit for the second quarter ended September 30, 2006, at Rs 249.51 crore compared with Rs 165.27 crore during the corresponding quarter last year.

Total income of the bank grew by 22.15 per cent to Rs 1,440.13 crore from Rs 1,178.91 crore during the period under review.

"The excellent recovery from NPAs, increase in prime lending rate and non-interest income have contributed to the growth in profit," said K N Prithviraj, chairman and managing director, Oriental Bank of Commerce.

Profit before extraordinary items (amalgamation adjustment write-off due to Global Trust Bank merger with OBC) stood at Rs 310.75 crore during the June-September quarter of 2006 compared to Rs 226.51 crore during the same period last year.

The integration of Global Trust Bank with OBC is complete and the total business of the combined entity grew by 24 per cent to Rs 98,431 crore in the half year ended September 30, 2006.

Net NPAs of the bank reduced to Rs 171.01 crore from Rs 211.94 crore. The bank's capital adequacy ratio (CAR) as on September 30 was 13.34 per cent.

The interest income of OBC grew by 27 per cent to Rs 1,282 crore from Rs 1,007 crore last year.OBC plans to raise tier-I capital of Rs 250 crore from the issue of perpetual bonds during the current financial year. The capital would be used by the bank to meet the capital adequacy ratio as prescribed in the Basel-II norms. "The board has given approval for the issue, but we are in no hurry to raise the capital. We will wait and then make a move," Prithviraj said.

The shares of OBC dropped by 0.97 per cent to close at Rs 259.65 per share, Rs 2.55 lower than Rs 262.2 during the previous trading day on the Bombay Stock Exchange.