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Oriental Bank of Commerce (OBC), a public sector bank, is on track to achieve a bottomline of at least ₹1,000 crore this fiscal, said its Managing Director and CEO Mukesh Kumar Jain.
“We are confident that the current momentum in bottomline performance will continue in the next quarters as well. We will achieve the ₹1,000-crore bottomline that was guided earlier,” Jain told BusinessLine.
Asked where this optimism came from, Jain said he expects at least a few large Insolvency and Bankruptcy Code (IBC) cases that are before the National Company Law Tribunal (NCLT) to get resolved in the next two quarters. This will boost the bottomline performance, besides the increased recovery efforts outside the NCLT, he said.
As on date, OBC has gross non-performing assets of over ₹21,000 crore. Of this, over ₹16,000 crore are related to cases currently before the NCLT under the IBC.
Jain also said that the government’s proposed amendments to the IBC are “comprehensive and welcome”, and will boost the chances of resolution of the large cases in the coming days.
Net profit
Meanwhile, OBC, on Monday, reported a net profit of ₹112.68 crore for the first quarter ended June 30, 2019. In the same quarter last fiscal, the public sector bank had recorded a net loss of ₹393.21 crore.
Much of the better bottomline performance could be attributed to lower provisioning for non-performing assets (NPAs) coupled with treasury gains, said Jain.
The slippages for the quarter under review nearly halved on a year-on-year basis, leading to lower NPA provisioning.
Total income for the quarter under review was ₹5,634.98 crore, higher than the ₹4,729.58 crore recorded in the same quarter last fiscal.
Operating profit for the quarter under review increased to ₹1,025.11 crore (₹724.25 crore). Provision for NPAs for the quarter under review stood at ₹865.48 crore, lower than the ₹1,222.51 crore provided in the same quarter last fiscal.
For the fourth quarter ended March 31, 2019, OBC had reported a net profit of ₹201.50 crore, compared to a net loss of ₹1,650 crore in the same quarter last fiscal.
It may be recalled that OBC had, in 2018-19, registered a turnaround in financial performance, recording a net profit of ₹55 crore for that fiscal. The public sector bank had posted net losses in the previous two years. In 2017-18, it had recorded a net loss of ₹5,872 crore.
Fresh capital infusion
Jain also made it clear that the bank was quite comfortable on the capital front and was not looking for any fresh capital infusion from the government. “We have not made any requests for capital with the government. We don’t want our name to figure in the list of banks for which government would allocate ₹70,000 crore capital as announced in the Budget,” he said.
For 2019-20, OBC expects to record a net interest margin (NIM) of 2.75 per cent, said Jain. In the first quarter this fiscal, the bank’s NIM stood at 2.41 per cent.
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