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Our Bureau

New Delhi, July 26 Aided by reduction in cost of deposits, improved yield on advances and a write-back of income-tax provision of Rs 147 crore relating to previous year, Oriental Bank of Commerce (OBC) has reported a net profit of Rs 220.52 crore for the first quarter ended June 30 compared with Rs 139.18 crore recorded in the same quarter last year.

The write-back of income-tax provision has come about on account of change in the basis of valuation of investments. Income-tax liability was hitherto provided considering the valuation of investments, other than ‘held to maturity’ category, on bucket basis. Now, the valuation has been changed to scrip-wise with effect from March 31, 2008.

The total income of the bank stood at Rs 2,159.21 crore (Rs 1,680.34 crore)Officials of the bank said the quarterly results are not strictly comparable on a year-on-year basis in respect of provision on non-performing advances.

The provisions on non-performing advances have this quarter been made as per prudential norms of Reserve Bank of India, whereas in the corresponding quarter such provisions were made on rates higher than RBI’s provisioning norms.

Moreover, OBC had by March 31, 2008 fully written off the excess of liabilities over assets taken over of erstwhile Global Trust Bank and hence there was no further write off required in this quarter on this account. For the quarter ended June 30, 2007, OBC had written off Rs 61.24 crore.

The bank had also taken efforts to shed some high cost deposits during the quarter under review, officials said.

Deposits of the bank grew 29.06 per cent from Rs 64,511 crore as on June 30, 2007 to Rs 83,258 crore as on June 30,2008.

More Stories on : Public Sector Banks | Oriental Bank of Commerce

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