The Hindu Business Line : Oriental Bank posts 11 pc rise in net profit

Mr K. N. Prithviraj, CMD, Oriental Bank of Commerce, and Ms H. A. Daruwalla, Executive Director, at a press conference in the Capital on Thursday. - - Ramesh Sharma

New Delhi , May 26

THE Oriental Bank of Commerce's (OBC) net profit has gone up by 11 per cent to Rs 760.81 crore for the fiscal 2004-05 from Rs 686.07 crore last fiscal.

The Chairman and Managing Director, Mr K. N. Prithviraj, said that the bank's total business at present is around Rs 76,000 crore and the target fixed for the current financial year is to cross the Rs 1-lakh-crore mark by March 2006.

The bank is also looking beyond the Indian shores and is awaiting RBI's clearance to set up a branch in Dubai. "We are also looking at countries like Malaysia and Senegal. But these are at a preliminary stage," he said.

OBC has been able to tide over the crisis that followed its merger with Global Trust Bank. The bank had to absorb around Rs 1,322-crore losses of GTB and around Rs 1,309 crore of non-performing assets (NPAs).

"The losses would be amortised over a period of five years, while we are trying to recover the NPAs. Till now, around Rs 200 crore had been recovered," Mr Prithviraj said.

To meet additional capital requirements, the bank is considering raising more capital through bonds or preferential shares to adhere to the stringent tier-II capital norms.

During the year, the bank's business marked an improvement of 33.9 per cent from Rs 56,286 crore in March 2004 to Rs 75,347 crore in March 2005. Total deposits during the year went up to Rs 47,850.33 crore in March 2005 from Rs 35,673.50 crore in March 2004. Advances also increased to Rs 25,299 crore from Rs 19,680.76 crore during the year. Its capital adequacy ratio currently stands at 9.21 per cent.

The chairman said that the bank's thrust would be on its retail business, since this segment has shown a growth of 27 per cent last fiscal. He added that the bank is working on plans to turn the GTB network into a profit engine through aggressive recovery, cost control, boosting non-interest income, the cross-selling of products and branch rationalisation.

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