MUMBAI: Oriental Bank of Commerce (OBC) net profit fell to Rs 19.5 crore in the quarter ended December 31, 2014, compared with Rs 224 crore in the year-ago period and Rs 291 crore in the earlier quarter.
Some of the key reasons for drop in profit was higher gross NPAs, fresh slippages during the quarter, and rise in operating and interest expenses. A one-time gain of Rs 137 crore was a critical factor in the bank posting profits.
Gross NPAs rose to 5.4 per cent of the loans, compared with 3.87 per cent in the year-ago period. Restructuring of loans was to the tune of Rs 2,050 crore and fresh slippages was Rs 1,340 crore.
Provisions and contingencies rose to Rs 885 crore during the quarter from Rs 561 crore a year earlier.
The bank said its interest expense rose to Rs 3,649 crore during the third quarter compared with Rs 3,492 crore a year earlier. Operating expenses rose to Rs 795 crore compared with Rs 713 crore.
Non-interest income rose by a whopping 50 per cent to Rs 512 crore from Rs 341 crore in the year earlier period, even as total income rose just 7.8 per cent to Rs 5458 crore.
The bank has a capital adequacy of 11.26 per cent and expects to get some capital from the government.