Page 19 - Banking Finance December 2017

PRESS RELEASE

Oriental Bank of Commerce posts Q2 net loss at Rs 1,750 cr as

provisions increase 4-fold

Public sector lender Oriental Bank of Commerce has posted Gross non-performing assets as a percentage of gross
a net loss at Rs 1,750 crore for July-September quarter advances were higher at 16.3 percent in Q2, from 14.83
despite sharp increase in other income and operating profit, percent in Q2FY18 but net NPAs were lower at 9.44 percent
as provisions for bad loans increased more than four-fold.The from 9.56 percent QoQ.
bank had reported profit at Rs 153.3 crore year-ago quarter. In absolute terms, gross NPAs during the quarter increased

Net interest income during the quarter fell 4.9 percent to to Rs 26,432 crore against Rs 24,409 crore, but net NPAs fell
Rs 1,251.7 crore year on year, with loan growth of 4.8 to Rs 14,129 crore from Rs 14,809 crore quarter on quarter.
percent at Rs 1.49 lakh crore.Loan book on sequential basis Other income (non-interest income) spiked 81.55 percent
degrew by 0.3 percent. to Rs 1,059.24 crore and operating profit jumped 62.3
Provisions and contingencies more than doubled to Rs percent to Rs 1,551.4 crore compared with same quarter
3,281.3 crore, compared with Rs 1,469.5 crore in previous last fiscal.
quarter and rose more than four fold compared with Rs At 15:02 hours IST, the stock price was quoting at Rs
774.54 crore in corresponding year. 127.10, down Rs 8.50, or 6.27 percent on the BSE.

Oriental Bank stock drops 6% as asset quality worsens in Q2

Shares of Oriental Bank of Commerce slumped 6% after the the quarter also rose by 44% yoy to Rs 2,6431 crore in
bank's asset quality deteriorated in the three month period Q2FY18 vs Rs,18,382 crore in previous year corresponding
ended September. quarter.
The NII for the quarter declined by 5% yoy to Rs 1,252 crore Provisions for the quarter jumped more than 3 times to Rs
in Q2FY18 vs Rs 1,316 crore in previous year corresponding 3,281 crore in Q2FY18 vs Rs 774 crore in Q2FY17. This
quarter. This was largely due to subdued interest income by resulted into a net loss of Rs 1,749 crore in Q2FY19 vs net
5.2% yoy & also decline in interest expended by 5.3% yoy. profit of Rs 153 crore in Q2FY17.
Asset quality of the bank saw tremendous deterioration as Oriental Bank of Commerce is currently trading at Rs 128,
GNPA's percentage to total advances grew by 394 bps to down by Rs 7.6 or 5.6% from its previous closing of Rs 135.6
16.3% vs 12.63% in Q2FY17. While NNPA's also advanced on the BSE. The scrip opened at Rs 136.5 and has touched
by 51 bps to 9.44% vs 8.93% in Q2FY17. Total GNPA's for a high and low of Rs 137.25 and Rs 125.7 respectively.

Oriental Bank of Commerce to launch Rs1,000 crore bond issue to
comply with Basel III norms

State-owned Oriental Bank of Commerce plans to raise up The Gurgaon headquartered bank said the proposed bond
to Rs1,000 crore by issuing Basel III compliant bonds on a
issue has been rated A (Hyb) with negative outlook by ICRA
private placement basis.
and A with negative outlook by CARE.
"The bank intends to raise tier I capital through private
placement of Basel III compliant additional tier I bonds of Banks across the globe have to mandate themselves with
Rs 10 lakh each aggregating to Rs 500 crore with an option the Basel III standards that seek to protect them against
to retain subscription of up to Rs 500 crore," it said in a unfavourable economic conditions by improving and
regulatory filing. strengthening their capital planning processes.

BANKING FINANCE | DECEMBER | 2017 | 19

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