Home > Companies > Company Results > Oriental Bank of Commerce posts 112.7 crore net profit in Q1

NEW DELHI : State-owned Oriental Bank of Commerce (OBC) State-run Oriental Bank of Commerce (OBC) posted net profit of 112.68 crore in the June quarter, as fewer new loan accounts turned bad and higher recovery of soured loans. It reported loss of 393 crore in the year-ago period and profit of 201.50 crore in the March quarter.

OBC’s interest income grew 15% to 4,919.82 crore in the three months ended 30 June from a year earlier. Gross non-performing assets (NPA) declined to 12.56% in the June quarter from 17.89% a year ago, and net NPA fell from 10.63% a year ago to 5.91%, the Gurugram-based company said, attributing the reason behind the drop to higher cash recovery and lower fresh slippages.

“Bank’s asset quality has shown consistent improvement since March 2018. Fresh slippages in Q1-20 (April-June quarter of 2019-20) reduced to 1,413 crore against 2,381 crore in Q1-19 (April-June quarter of 2018-19)," the lender said in a statement.

OBC’s provisioning coverage ratio (PCR) increased to 76.3% as of June, from 64.6% a year ago. PCR is the amount set aside to cover NPAs.

As far as the government’s idea of consolidation of public sector banks (PSBs) is concerned, managing director and chief executive officer of OBC, Mukesh Kumar Jain, told reporters that the bank has done an internal exercise on acquiring another bank. “We are ready with that. There is nothing as such that we have been asked to identify any other bank," he said.

“Given a choice by the government, we would like to be an acquirer bank," Jain said.

With respect to the Union budget’s announcement of infusion of 70,000 crore capital into PSBs to boost credit, Jain said OBC is adequately capitalized and is not looking for fresh capital infusion from the government.

OBC has an exposure of 1,150 crore, as far as Dewan Housing Finance Corp. Ltd (DHFL) is concerned. The beleaguered housing finance company is yet to pay the interest instalment for the month of June, while payments have been made till 31 May. “DHFL is in the process of submitting the resolution plan," he added.

Jain said that the lender has exposure of more than 2,000 crore from three accounts—Ruchi Soya, Bhushan Power and Alok Industries—at bankruptcy tribunal and expects recovery soon.

Shares of Oriental Bank of Commerce on Monday ended at 80.35 on the National Stock Exchange, down 2.01% from the previous close.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaper Livemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Logout