Oriental Bank of Commerce analysis

Topics: Capital requirement, Capital adequacy ratio, Tier 1 capital Pages: 13 (1146 words) Published: October 12, 2014
Abhishek Angadi (A005)

Anshul Garg (A015)

Manan Gupta (A018)

Rishabh Jain (A022)

Manasa Koralla (A027)

Anuj Tekumal(A052)

Aneesh Vijh (A055)

EXECUTIVE SUMMARY
Overview of the Bank

Key Financial highlights
Business Model/ Exposure to different sectors
Performance analysis
-Segment Analysis
-Asset Quality & Restructuring/Provisioning
-Key ratios
-CAR and capital requirement
-Peer analysis
-Camel

Road ahead/Future Outlook

OVERVIEW
HEADQUARTERS: GURGAON, HARYANA
Mr. S L Bansal
Chairman & MD

Founded &
established in
Lahore in 1943

Nationalised in
1980

GTB
amalgamated
into OBC in 2004

Crossed Business
mix of Rs 2 lakh
crore in 2010

Reorientation of
lending strategy
from Large
Corporates to
PSL, Retail and
Rural
Development

KEY HIGHLIGHTS FOR 2013-14
PARAMETERS

2012-13

2013-14

% CHANGE

Business Mix

Rs 3,06,084 cr

Rs 3,34,254 cr

9.20 %

CASA Deposits%

Rs 43184 cr (24.55%)

Rs 47,043 cr (24.31%)

8.93%

Priority Sector Lending

Rs 46,780 cr

Rs 51,643 cr

10.39%

Operating Profit

Rs 3,691 cr

Rs 4,156 cr

12.59%

Net Profit

Rs 1,328 cr

Rs 1,139 cr

-14.23%

Net Interest Income

Rs 4701 cr

Rs 5,127 cr

9.06 %

Net Non Interest Income

Rs 1654 cr

Rs 1945 cr

17.56 %

Business per Employee

Rs 16.20 cr

Rs 17.10 cr

5.55 %

Gross NPA

3.21%

3.99%

24.30%

Net NPA

2.27%

2.82%

24.23%

Total Delivery Channels

3452

4254

23.23 %

PROVISION COVERAGE RATIO

CREDIT DEPOSIT RATIO

PRIORITY SECTOR LENDING

60.15%

72.91%

40.07%

BANK BUSINESS MODEL
Credit to Priority Sector


Bank’s advances to priority sector registered a growth of 10.39%. The Priority Sector Advances constituted 40.05 % of the Adjusted Net Bank Credit (ANBC) against the stipulation of 40%



Fresh flow of credit to Agriculture sector amounted to ` 12982.49 crore.



Exposure to Different sectors

Bank increasing its focus on MSE lending both in PS and NPS lending Recording a growth of 26.11% against the Y-o-Y growth stipulation of 20%.

Retail Credit


In current FY, bank has achieved YOY growth of 11% in Retail Credit, which is 11.46% of total advances.( loan against gold ornaments seen highest growth 33%)



Total Deposits increased by 10.00% ; whereas Gross advances registered a modest 8.13% growth



126 new branches, 64 branches were opened in rural centres (out of which,48 in unbanked rural centres) and 39 in semi-urban centres – In line with Bank’s plan to expand in MSME segment

3rd Party Products
• Govt Business : The Bank has started PPF & SCSS business through 50

authorized Branches pan India


OBC-SBI credit cards



Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd



More concentrated in industries and infrastructure



Huge exposure to Power sector mainly to loss making Northern State Govt discoms

PERFORMANCE ANALYSIS - Asset Quality
•Bank in major
consolidation phase:
Write Offs almost 45% of
the reductions in NPA
Asset worth 290 crore
sold to ARC

•Restructuring of assets: Signs of
exposure to cyclical industries
•Heavy restructuring in Infra
sector

PERFORMANCE ANALYSIS- Segment Analysis
SEGMENT

REVENUE (CY)

REVENUE (PY)

% OF TOTAL REV. (CY)

YoY GROWTH

TREASURY

480394

417677

19.26

15.02

CORPORATE

1096008

1068026

43.95

2.62

RETAIL

886181

779638

35.54

13.67

OTHER

31187

22187

1.25

40.56

TOTAL

2493770

2287528

SEGMENT

EBIT (CY)

EBIT (PY)

%AGE OF TOTAL EBIT
(CY)

YoY
GROWTH

EBIT
MARGIN

TREASURY

45721

60078

30.15

-23.90

9.52

CORPORATE

1096008

1068026

33.94

12.95

4.70

RETAIL

886181

779638

27.41

30.37

4.69

OTHER

31187

22187
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