Oriental Bank of Commerce Bank on Friday reported a 60.94% decrease in its first quarter net profit.
Net profit declined to Rs.100.69 crore in the quarter ended 30 June from Rs.257.84 crore a year ago on account of higher provisions and lower operating profit.
Provisions increased to Rs.750.40 crore for the June quarter compared to Rs.577.65 crore last year, while operating profit declined from Rs.1,044.49 crore last June to Rs.917.09 crore this June.
Out of total provisions, the bank provided outstanding provision of Rs.36.04 crore for a loan availed by the government of Punjab under the food credit program in the first quarter for which the outstanding amount was Rs.740 crore as on 30 June.
The provision coverage ratio for the bank stood at 49.33% for the June quarter.
According to a Bloomberg poll of six analysts, the bank was expected to post a net profit of Rs.91.56 crore for the June quarter.
Net interest income, or the core income a bank earns by giving loans, decreased marginally to Rs.1,204.59 crore this quarter compared to Rs.1,328.51 crore a year ago.
Gross non-performing assets (NPAs) more than doubled from Rs.8,577.04 crore last June to Rs.17,208.91 crore this June.
As a percentage of total loans, gross NPAs were 11.45% at the end of the June quarter, compared with 9.57% in the previous quarter and 5.85% in the year-ago quarter.
Net NPAs stood at 8.11% for the first quarter compared to 6.70% in the last quarter and 3.76% a year ago.
Capital adequacy ratio stood at 12.40% for the June quarter, according to Basel III norms.
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