OBC scores near 5-fold rise in quarterly profit to Rs 101 crore
The bank had posted a profit of Rs 257.84 crore in the similar April-June quarter of previous fiscal 2015-16. Total income of the bank also fell to Rs 5,392.70 crore for the quarter under review from Rs 5,568.78 crore in the year-ago period.
However, the profit numbers were better than that of Rs 21.62 crore in the previous January-March quarter. "The better performance is because of less slippage, as there was more than 200 per cent improvement in the recovery and upgradation which is Rs 692 crore in the June quarter," OBC Managing Director & Chief Executive Officer Animesh Chauhan told reporters here. On asset front, challenges persisted during the quarter, as gross non-performing assets (NPAs) doubled to 11.45 per cent of gross advances, as against 5.85 per cent year ago. In absolute terms, gross bad loans were Rs 17,208.91 crore, up from Rs 8,577.04 crore a year ago.
Net NPAs also rose by two-fold at 8.11 per cent (Rs 11,734.30 crore) of net advances as of June 2016, against 3.76 per cent (Rs 5,337.77 crore) year ago. The sharp rise in bad loans proportion led to higher provisioning of Rs 750.40 crore as on June 2016 as against Rs 577.65 crore a year ago.
"Fresh slippages this quarter has been Rs 3,463 crore, majorly contributed by Rs 1,070 crore from iron and steel and Rs 959 crore from textile sector. But it seems now onwards the asset quality should stabilise because the slippages we look at in future are much less than what has happened," Chauhan said.
Also, OBC's recovery including upgrated assets increased to Rs 691.69 crore against Rs 478.61 crore in March quarter. Chauhan said treasury gains also helped the bank clock better results in the quarter, as it rose to Rs 1,508.04 crore in the first quarter of 2016-17, against Rs 1,314.65 crore.