Aided by lower provisioning on non-performing assets (NPAs), Oriental Bank of Commerce (OBC) on Monday reported a net profit of Rs 112.68 crore for the first quarter ended June 30, 2019. In the same quarter last fiscal, the public sector bank had recorded a net loss of Rs 393.21 crore.
Total income for the quarter under review was Rs 5,634.98 crore, higher than the Rs 4,729.58 crore recorded in the same quarter last fiscal.
Operating profit for the quarter under review increased to Rs 1,025.11 crore (Rs 724.25 crore). Provision for NPAs for the quarter under review stood at Rs 865.48 crore, lower than Rs 1,222.51 crore provided in same quarter last fiscal.
For the fourth quarter ended March 31, 2019, OBC had reported a net profit of Rs 201.50 crore, compared to a net loss of Rs 1,650 crore in the same quarter last fiscal.
It may be recalled that OBC, had, in 2018-19 registered a turnaround in financial performance, recording a net profit of Rs 55 crore for that fiscal. The public sector bank had posted net losses in the previous two years. In 2017-18, OBC had recorded a net loss of Rs 5,872 crore.
Commenting on the first quarter financial performance, Mukesh Kumar Jain, Managing Director & CEO, said that the bank recorded strong bottomline performance on the back of lower provisioning for NPAs and treasury gains. The slippages for the quarter nearly halved on a year-on-year basis, leading to lower NPA provisioning.
Jain expressed confidence that this profit momentum will be maintained in the coming quarters too. "We are very much on track to achieve Rs 1,000 crore bottomline for 2019-20 as guided earlier this year", Jain told BusinessLine. Asked where this optimism came from, Jain said that he expects atleast few large IBC cases that are before the NCLT to get resolved in the next two quarters. This will boost the bottomline performance besides the increased recovery efforts outside NCLT, he said.
For 2019-20, OBC expects to record a net interest margin (NIM) of 2.75 per cent. In the first quarter this fiscal, the bank's NIM stood at 2.41 per cent.
Jain also made it clear that the bank was quite comfortable on the Capital front and was not looking for any fresh capital infusion from the Government."We have not made any requests for capital with the Government. We don't want our name to figure in the list of banks for which Government would allocate Rs 70,000 crore capital as announced in the budget", he said.