Higher provisioning due to worsening asset quality dented Oriental Bank of Commerce’s third quarter bottomline performance.
The public sector bank reported a net loss of ₹425 crore for the third quarter ended December 2015. This is against a net profit of ₹20 crore posted in the year-ago quarter.
In the second quarter this fiscal, OBC had reported a net profit of ₹301 crore.
The bottomline in the reporting quarter was weighed down by a sharp rise in provisioning to ₹1,183 crore (₹569 crore in the previous quarter and ₹885 crore in the same quarter last fiscal).
“It is increased provisioning that has led to this weak bottomline performance for us this third quarter,” G Rajkiran Rai, Executive Director, OBC, told BusinessLine.
Rai said the quarter under review saw slippages to the tune of ₹3,900 crore. A large portion of the slippages was accounted for by the iron and steel sector (₹2,200 crore).
Rai said that he expects stress to continue in the fourth quarter as well.
Total income stood at ₹5,351 crore, lower than the ₹5,459 crore recorded in the same quarter last fiscal.
Operating profit stood at ₹766 crore (₹1,015 crore).
Meanwhile, the OBC board has its given nod for a preferential allotment of equity to the government for an amount of up to ₹1,000 crore and to Life Insurance Corporation for up to ₹500 crore.