The Hindu Business Line : Oriental Bank's Q2 net up 51 pc after GTB write-offs

Oriental Bank of Commerce (OBC) on Monday announced a profit after tax (PAT) of Rs 310.75 crore for the quarter ended September 30, up 37.2 per cent over the corresponding figure of Rs 226.51 crore for the previous fiscal.

After writing-off Rs 61.24 crore against liabilities on account of the amalgamation with Global Trust Bank (GTB), OBC's net profit for July-September 2006 stood at Rs 249.51 crore, 51 per cent more than the Rs 165.27 crore for July-September 2005.

Operating profit dips

For the first half of the current fiscal, the PAT at Rs 466.01 crore was 40.7 per cent higher than the Rs 331.28 crore for the six months ended September 30, 2005. The corresponding growth in net profit after adjusting for GTB amalgamation liabilities stood at 64.5 per cent (from Rs 208.80 crore to Rs 343.53 crore).

The operating profit numbers have, however, not been as impressive as the net profit growth figures. For the six months ended September 30, OBC's operating profit at Rs 665.12 crore rose by just 8.9 per cent over Rs 610.89 crore for the first half of 2005-06. The second quarter operating profit at Rs 314.13 crore actually registered a 3.6 per cent drop over the Rs 325.91 crore figure for July-September 2005. "Our operating profit growth has suffered because of a Rs 38 crore fall in treasury income during the first half, arising from depreciation in value of government securities. Also, our deposit costs have gone up," the CMD of OBC, Mr K.N. Prithviraj, told presspersons here.

Cash recovery

The increased overall profit has come mainly from good cash recovery in non-performing assets. "Our gross NPA have fallen from Rs 2,385.29 crore (7.9 per cent) on September 30, 2005 to Rs 1,848.62 crore (4.8 per cent) on September 30, 2006, while net NPAs have reduced from Rs 211.94 crore (0.8 per cent) to Rs 171.01 crore (0.5 per cent)," he added.

The capital adequacy ratio of the bank is currently "very healthy" at 13.34 per cent.

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