Oriental Bank Has Reported a 2.37% Decline in Its Net Profit

By | June 15, 2011

A recent press report said that Oriental Bank of Commerce reported a 2.37 per cent decline in net profit for the first quarter ended June 30, 2011 at Rs 354.70 crore.

Reports said that the decline in profit was due to the increase in the cost of deposits much sharper than the increase in yield on advances, leading to lower net interest margin of 2.94 per cent for the quarter under review as against 3.34 per cent in Q1 of 2010-11. Total income for the quarter under review grew 28.72 per cent to Rs 3,920.36 crore.

Reports also said that the NIM situation of the bank is expected to improve from the second quarter as the bank has planned to hike its base rates. This will in fact make loans such as home loan, vehicle loan, personal loan, educational loan, business loan etc. costlier to its borrowers.

Mr. V. Kannan, Executive Director, OBC, said that the RBI’s recent guidelines for provisioning of existing bad debts led to an incremental one-time provisioning of Rs 79.52 crore. For restructured assets, the incremental provisioning as mandated by RBI has led to increased provisioning of Rs 60.34 crore in first quarters.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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