Oriental Bank reports Rs196 profit in Q4 2008-09
27 April 2009
Public sector Oriental Bank of Commerce today reported a quarterly profit of Rs196 crore against a loss of Rs99 core in the same quarter last year, helped by increased interest income. OBC also and forecast improved performance in the current financial year 2009-10.
OBC registered a net loss of Rs99 crore in the January-March 2008 quarter as it took a Rs242 crore hit on account of a government-mandated takeover of the failed Global Trust Bank.
Oriental Bank is aiming at better net interest margins and a faster rise in net interest income in the current financial year that began on 1 April, by retiring higher interest deposits and raising low-interest deposits, chairman Alok Misra said.
Banks had raised deposits at rates as high as 11 per cent last year in bid to shore up resources. But, with the Reserve bank of India cutting rates from October 2008, there was a squeeze on banks' net interest margins.
"Net interest margin has been under pressure because, for one, let me concede, our CASA (current accounts and savings accounts) has been lower," Misra said.
Oriental Bank had a net interest margin of 2.2 per cent in 2008-09 and the bank expects this to go up to 2.4-2.5 per cent in the current fiscal, Misra said.
Net interest income, which rose 18.7 per cent to Rs1,996 crore in 2008-09, would rise "over 20 per cent" in 2009-10, he added.
Oriental Bank said the figures for Quarter and Year ended 31 March 2008, have been classified pursuant to the guidelines issued by Reserve Bank of India on AS-17 effective from 31 March 2008.The figures for previous periods are not reclassified and therefore not comparable.