Aided by a 25-basis point fall in the cost of deposits on a year-on-year basis, Oriental Bank of Commerce (OBC) on Thursday reported a net profit of ₹258 crore for the first quarter ended June 30.
This bottomline performance reflected a turnaround of sorts, given that the bank had reported a net loss of ₹178 crore in the March quarter.
The latest June quarter bottomline was, however, lower than the net profit of ₹365 crore reported in April-June last fiscal.
“If you net out the amount of ₹137 crore being sale proceeds of the two assets sold to asset reconstruction companies and later reversed in the third quarter (2014-15), our bottomline this first quarter is up by 13 per cent on a year-on-year basis,” Animesh Chauhan, MD and CEO, told a press conference here.
The sale proceeds of ₹137 crore taken to the profit and loss account in the first quarter last fiscal had to be reversed in the third quarter in the wake of objections raised by the RBI. Chauhan highlighted that the bank had reported a net profit of ₹258 crore despite higher slippages in asset quality for the quarter under review.
Slippages this time to non-performing assets (NPAs) has been higher at about ₹1,600 crore. Of this, only two accounts accounted for slippages of ₹640 crore. These two accounts have slipped from the restructured book account, he said. Going forward, Chauhan expressed hope that the asset quality of the bank will improve on the back of an expected revival in economic growth.
“Generally the first quarter is not the best quarter for banks. It is usually the third and fourth that are the best. We never predicted this first quarter to be good for us. Our expectation is that we should be able to sustain this performance in the remaining quarters also,” he said when asked to comment on the outlook for the entire fiscal.
Net interest margin stood at 2.65 per cent.