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Aided by strong show on the core operations front, Oriental Bank of Commerce (OBC) on Friday reported a 41.05 per cent increase in net profit for the third quarter ended December 31, 2010, to Rs 408.25 crore (Rs 289.43 crore).
Total income for the period under review increased 12.20 per cent to Rs 3,264.17 crore (Rs 2,909.27 crore).
For the nine months ended December 31, 2010, OBC has reported a 43 per cent increase in net profit to Rs 1,169.21 crore (Rs 817.64 crore). This net profit increase came despite a substantial fall in profit on sale of government securities during this period.
The bottom-line performance for the first nine months is higher than the net profit of Rs 1,134.68 crore recorded by the bank during the entire 2009-10.
Growth strategy
“Someone said boring banking…This (boring banking) has led to the growth… deposit taking and lending…. That is my core competence. Other things are all incidental to my existence,” Mr Nagesh Pydah, Chairman and Managing Director, OBC, told Business Line , when asked what had led to this strong bottom-line growth.
While declining to put a number to the profit target for the current fiscal, Mr Pydah however noted that the bank was looking to grow its bottom-line by at least 20 per cent this fiscal.
“Our effort would be to maintain a net interest margin of over 3 per cent this fiscal,” he said, adding that NIM of the bank stood at 3.10 per cent for the quarter ended December 2010 and 3.25 per cent for the nine months ended December 31, 2010.
To improve CASA
On CASA deposits, Mr Pydah, who assumed charge of OBC early this month, said that the bank has embarked on an ambitious project to improve its CASA deposits by 2 percentage points. Currently CASA is about 25 per cent, which the bank wants to take to 27 per cent by end-March 2011.
Meanwhile, Mr Pydah ruled out further increases in deposit rates even as he indicated that there could always be a correction on the lending side. “Retail deposit rates have touched the level we were looking at,” he said.
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