The Hindu Business Line : OBC eyes Rs 1-lakh cr biz this fiscal

BUOYED by the significant reduction in operating losses of the erstwhile Global Trust Bank (GTB) during the quarter ended March 2005, Oriental Bank of Commerce (OBC) has set a target of achieving Rs 1-lakh crore business for the combined entity for the current fiscal, a growth of nearly 25 per cent over Rs 76,000 crore business during the fiscal 2004-05.

Disclosing this at a press conference here on Wednesday, the OBC Chairman and Managing Director, Mr B.D. Narang, said the operating losses of GTB had come down to Rs 11 crore during the last quarter from Rs 69 crore in the previous quarter. Further, GTB also recorded substantial growth in deposits from Rs 4,000 crore to Rs 7,500 crore after its acquisition by OBC.

"We expect GTB to start recording operating profit from the next quarter onwards. We hope GTB will contribute to the bottomline of OBC from the current fiscal onwards. Further, OBC expects to cover the deficit arising out of GTB acquisition to be covered in 12-18 months," Mr Narang said.

Stating that only 11 out of a total of 104 branches of GTB were currently empowered to lending while the balance branches were completely focussing on deposit mobilisation, Mr Narang said, OBC has now decided empower all the branches of GTB and turn them into lending branches.

"To begin with, we will expect GTB branches to take up retail lending programme. And as their confidence picks up, we will give them more powers to sanction all types of loans as being done in the similar sized OBC branches. We expect the rate of growth to definitely move up significantly if all the 104 branches of GTB were empowered to lending. Simultaneously, we expect their ability to garner deposits will also grow up. Towards this, we have started training the GTB branches in various loans - retail, housing and educational. Aimed at providing marketing and supervisory support to the GTB branches, we are planning to open more regional offices manned by senior officials," Mr Narang said.

With the help of these measures, OBC expects to clock a growth rate of over 25 per cent and close the current financial year at a business level of Rs 1-lakh crore, he said.

According to him, the capital adequacy ratio of OBC, which stood at around 16 per cent before its acquisition of GTB, has come down to around nine per cent plus after the acquisition. "To attain the business targets, we need to augment capital adequacy ratio. Further, the bank has to become Basel-II Accord compliant for which further capital will be required. Accordingly, the bank is going in for second public issue."

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