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

Shares of Oriental Bank of Commerce slumped 6% after the bank’s asset quality deteriorated in the three-month period ended September.

The NII for the quarter declined by 5% yoy to Rs 1,252 crore in Q2FY18 vs Rs 1,316 crore in previous year corresponding quarter. This was largely due to subdued interest income by 5.2% yoy & also decline in interest expended by 5.3% yoy.

Asset quality of the bank saw tremendous deterioration as GNPA’s percentage to total advances grew by 394 bps to 16.3% vs 12.63% in Q2FY17. While NNPA’s also advanced by 51 bps to 9.44% vs 8.93% in Q2FY17. Total GNPA’s for the quarter also rose by 44% yoy to Rs 2,6431 crore in Q2FY18 vs Rs,18,382 crore in previous year corresponding quarter.

Provisions for the quarter jumped more than 3 times to Rs 3,281 crore in Q2FY18 vs Rs 774 crore in Q2FY17. This resulted into a net loss of Rs 1,749 crore in Q2FY19 vs net profit of Rs 153 crore in Q2FY17.

Oriental Bank of Commerce is currently trading at Rs 128, down by Rs 7.6 or 5.6% from its previous closing of Rs 135.6 on the BSE. The scrip opened at Rs 136.5 and has touched a high and low of Rs 137.25 and Rs 125.7 respectively.