In the previous quarter, the Gurugram-based bank had reported a net loss of Rs 486.20 crore. The bank's net interest income, or the difference between interest earned and interest expended, stood at Rs 1251.73 crore in the second quarter, down 4.9% from the corresponding period last year, it said in a notification to the stock exchanges.
State-run lender Oriental Bank of Commerce on Wednesday reported a net loss of Rs 1749.90 crore in the July-September quarter, compared with a net profit of Rs 153.26 crore in the year-ago period, on the back of a jump in provisions for bad loans and lower interest income. In the previous quarter, the Gurugram-based bank had reported a net loss of Rs 486.20 crore. The bank’s net interest income, or the difference between interest earned and interest expended, stood at Rs 1251.73 crore in the second quarter, down 4.9% from the corresponding period last year, it said in a notification to the stock exchanges. In the first quarter, the net interest income was Rs 1,146.36 crore. The bank’s total income during the quarter was Rs 5,511.70 crore, up 4.4% from the corresponding period last year and up 5.9% from the first quarter, helped by a growth in the bank’s other income.
The provisions for bad loans increased to Rs 3,146.92 crore during the quarter from Rs 687.48 crore a year ago. In the previous quarter, provisions for bad loans was Rs 1,591.48 crore. The bank said that it has provided for the entire Rs 868.41 crore provisioning related to its exposure to nine stressed accounts admitted by the National Company Law Tribunal (NCLT). The Reserve Bank of India (RBI) had asked the bank to provide for Rs 289.47 crore in the current quarter and the remaining amount in the subsequent two quarters, it added.
Oriental Bank of Commerce’s gross non-performing assets (NPA) increased to 16.30% of total advances from 12.36% in the year-ago period and 14.83% in the previous quarter. The net NPA during the quarter was 9.44%, up 51 basis points from the year-ago period but down 12 basis points from the first quarter.
The RBI put Oriental Bank of Commerce under its Prompt Corrective Action plan on October 5 due to the bank’s high NPAs. Under this plan, there are restrictions on a bank’s dividend distribution and remittance of profits. There are restrictions on branch expansion as well, and banks have to provide for higher provisioning.
In a notice to the stock exchanges, Oriental Bank of Commerce had said, “This action will not have any material impact on the performance of the Bank and will contribute in overall improvement in its risk management, asset quality, profitability and efficiency.”
Shares of the bank ended at Rs 128.40 on Wednesday, down 5.06% from the previous close.