Oriental Bank of Commerce (OBC) on Friday reported a 7.9 per cent decline in net profit for the quarter ended December 31, 2012, at Rs 354 crore (Rs 326 crore).
The bottomline was weighed down by a three-fold increase in provisioning towards non-performing assets to Rs 351 crore (Rs 101 crore).
It was also impacted by an additional one-time provisioning of Rs 78 crore on account of the Reserve Bank of India’s recent diktat requiring 2.75 per cent provisioning for restructured advances (against 2 per cent earlier).
There was also a provisioning of Rs 30 crore toward revision in wages.
“Had these provisions (for restructured advances and the revision in wages) amounting to Rs 108 crore not been there, our net profit for the third quarter would have seen good growth,” S. L. Bansal, Chairman and Managing Director, OBC, told newspersons here.
Restructured loans
As of end-December 2012, OBC’s restructured advances stood at Rs 11,798 crore.
For the quarter under review, there was fresh restructuring of Rs 741 crore and net decrease in outstanding in existing accounts restructured of Rs 426 crore. The outstanding restructured advances as on end-September 30, 2012, stood at Rs 11,483 crore.
Air-India is understood to have paid Rs 426 crore, bringing down its outstanding restructured advances to Rs 1,176 crore.
On the outlook for bottomline growth, Bansal expressed confidence over achieving a net profit growth of not less than 15 per cent this fiscal despite the tough economic environment.
“We should be able to achieve a net profit of Rs 1,300-1,400 crore this fiscal. At least Rs 1,300 crore should be possible.”
In 2011-12, OBC had recorded a net profit of Rs 1,142 crore. For the nine-month period ended December 31, 2012, the bank’s net profit stood at Rs 1,020 crore.
Bansal said the bank was comfortable on the capital front and that a call for further capital raising is likely to be taken only in the second half of next fiscal. For the quarter under review, OBC made treasury profits of Rs 61 crore, a 70 per cent year-on-year increase.