Public sector lender Oriental Bank of Commerce (OBC) disappointed analysts with third quarter earnings on Thursday with a loss of Rs 424.7 crore against profit of Rs 19.6 crore in year-ago period.
Lower other income & operating profit and higher provisions hit bottom line. Net interest income, the difference between interest earned and interest expended, grew by only 0.9 percent to Rs 1,309.32 crore in quarter ended December 2015 compared to Rs 1,297.47 crore in same quarter last fiscal.
Other income (non-interest income) declined 23 percent year-on-year to Rs 394.5 crore and operating profit fell 24.5 percent to Rs 766.4 crore in Q3.
Provisions for bad loans shot up 33.7 percent (up 107.8 percent sequentially) to Rs 1,183 crore during the quarter compared to Rs 885.1 crore in same quarter last fiscal, especially after considering asset quality review carried out by the Reserve Bank of India.
Asset quality deteriorated very badly in October-December period with gross non-performing assets (NPA) climbing to 7.75 percent compared to 5.7 percent in preceding quarter and 5.43 percent in year-ago period. Net NPA jumped to 4.99 percent from 3.55 percent quarter-on-quarter and 3.68 percent year-on-year.
In absolute term, gross NPA surged 38.2 percent sequentially (up 54.2 percent year-on-year) to Rs 11,824.9 crore and net NPA rose 41.8 percent quarter-on-quarter (44.9 percent YoY) to Rs 7,359.4 crore in Q3. Fresh slippages for the quarter stood at Rs 3,980 crore against Rs 770 crore in preceding quarter.
At 12:36 hours IST, the scrip of Oriental Bank of Commerce was quoting at Rs 88, down Rs 7.80, or 8.14 percent after hitting a 52-week low of Rs 86.65 on the BSE.
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