Oriental Bank of Commerce(OBC) posts net profit in Q3FY19

State-owned Oriental Bank of Commerce (OBC) on Tuesday reported a net profit of Rs 145 crore for the December 2018 quarter, on improvement in asset quality and increase in business efficiency.

It had posted a net loss of Rs 1,985 crore in the corresponding quarter of the previous financial year, OBC said in a regulatory filing.

Total income rose to Rs 5,128 crore during the third quarter, compared with Rs 4,756 crore a year ago.

The lender said it has improved on its efficiency with the net interest margin consistently rising from 1.95 per cent in the December quarter of 2017-18 to 2.80 per cent in the third quarter of this year. Sequentially, it increased from 2.58 per cent in the second quarter of this fiscal.

The bank's cost-to-income ratio also improved to 49.50 per cent in the quarter, from 50.87 per cent a year ago and 50.19 per cent in the second quarter.

Also read- Q3FY19 Results of all Public & Private Sector banks in India 

Net interest income, difference between interest earned and expended, increased to Rs 1,419 crore, compared with Rs 1,018 crore a year ago and Rs 1,275 crore in the previous quarter.

Meanwhile, OBC said it would issue more than 2.61 crore new equity shares under the employee purchase scheme at a price of Rs 71.76 per share.

The bank is expected to raise up to Rs 187.52 crore in this issue that is slated to offer for subscription by employees on January 31.

Moreover, the Gurugram-based lender also reported that its asset quality has also improved with gross non-performing assets (NPAs) falling to 15.82 per cent of the total advances in the quarter, against 16.95 per cent in the year-ago period.

Net NPAs stood at 7.15 per cent as compared with 9.52 per cent.

Value-wise, gross NPAs were Rs 24,352.98 crore in the December 2018 quarter, against Rs 27,550.88 crore a year ago. Net NPAs stood at Rs 9,972.61 crore as against Rs 14,195.07 crore. Provisions for bad loans, however, increased to Rs 4,082 crore in the quarter, from Rs 2,340 crore parked aside a year ago.

The bank said it made cash recovery of Rs 543 crore in written-off bad debt in the nine months to December 2018, up from Rs 149 crore during same period of the preceding fiscal.