Oriental Bank of Commerce (OBC) has reported relatively better performance among the state run banks. The bank managed to post double digit growth in income from operations for the quarter ended December 2001 and a 31% jump in net interest income.
Income from operations
Net interest income
Operating Profit Margin (%)
Provisions and contingencies
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (m)
Diluted Earnings per share*
The bank's operating margins also improved sharply in the first nine months of FY02 to 11% on the back of savings in employee cost. The bank had launched voluntary retirement scheme in FY01, which is helping it prune its employee costs. Its cost to income ratio consequently declined to 48% in the first nine months of FY02 from 55% in the comparable previous period.
During the first nine months, the bank's income from loans recorded a strong growth of 17%. In third quarter too, interest income rose by 14%. This is a commendable performance compared with a single digit growth or a decline in interest income reported by other public sector banks. The bank's interest income accounts for 46% of total operating income. OBC's investment income on the other hand, witnessed a marginal growth of 4% contributing 51% to the total.
Interest on advances
Income on investments
Interest on balance with RBI
At the current market price of Rs 40, OBC is trading at a P/E multiple of 3x and adjusted Price/Book value ratio of 0.7x FY02 projected earnings. The bank's stock has not witnessed a sharp rise in the current rally in the banking sector. Considering its valuations, which are currently lower compared to its peers and its earnings growth, the stock looks attractively priced.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407