BackOriental Bank of Commerce reports net loss of Rs424 crore
The bank reported a profit of Rs19 crore in the corresponding year-ago period
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New Delhi: In line with the trend seen over the past few days, Oriental Bank of Commerce (OBC) reported a net loss of ₹ 424 crore in the third quarter of the current financial year as bad loans surged and the bank had to put aside more funds for provisioning. The bank had reported a profit of ₹ 19 crore in the corresponding year-ago period.
After an asset quality review last month, Indian banks were asked by Reserve Bank of India to make higher provisioning for their bad debts over the third and fourth quarters of the financial year and classify certain loans as bad debts. As a result, most of the banks that announced their third quarter results have either reported a loss or a sharp fall in profits.
OBC’s gross non-performing assets or NPAs surged to 7.75% from 5.43% a year ago. Net NPAs also rose to 4.99% from 3.68%. Total provisions were up 20% to ₹ 1,191 crore. Of this, provisions for NPAs almost tripled to ₹ 1,450 crore in the quarter, from ₹ 500 crore in the year-ago period.
Net interest income rose marginally to ₹ 1,309 crore, from ₹ 1,297 crore. Net interest margin, a key measure of profitability, fell to 2.57% from 2.69%.
OBC’s scrip fell 11.06% to ₹ 85.20 on the BSE on Thursday while the benchmark index Sensex fell 3.40% to close at 22,951.83 points.
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