Confident of achieving over 3% on NIMs in FY13: OBC

State owned lender Oriental Bank of Commerce’s net profit rose by 10% year-on-year to Rs 391 crore in the quarter ended June 2012. Net interest income too grew by more than 10% to Rs 1,126 crore from Rs 1,018 crore during the same period.

Commenting on its results, the bank’s CMD, SL Bansal said the asset quality has improved which has boosted their confidence. However, he is unsure that the worst is behind them. But he assured that post September restructuring, business will be normal and the major hit for the banking balance sheet will be over. Talking about the bank's net interest margins, Bansal said, "We closed last financial year at 2.68%. We had given a guidance of 3%. Now we have moved to 2.76% and I am confident going forward we will be crossing 3% margin for FY13." Below is the edited transcript of his interview on CNBC-TV18. Q: Your asset quality picture is much better this quarter than the previous quarter. But can you say that the worst is behind you that what happened in Q4 will not happen again? A: I am not saying that the slippage will not continue. If one looks at the numbers, even this quarter, assets worth Rs 706 crore has slipped. But the result is Rs 686 crore of recovery. The most heartening part of the recovery is that we could recover Rs 196 crore in technical return of account. So it has boosted our confidence and that enabled us to show good numbers. Q: What have the fresh restructured accounts been this quarter? How much of it has come in from SEBs? A: This quarter we have restructured about Rs 2,039 crore worth of assets, out of which major asset is Rs 1,404 crore is from UP power. Next quarter, we are waiting for Punjab to happen, and with this, all discounts will be over. So overall, my restructured book as on date stands at Rs 10,953 crore. Q: After next quarter, you would say that you are not expecting significant restructuring of assets for the remainder of the year? A: Yes, because I believe that with this, Punjab Power is taken care of, another Rs 1,000 crore is in the pipeline; few good accounts, few major accounts are also in pipeline. After September restructuring, business will be normal and the major hit for the banking balance sheet will be over. Q: What about net interest margins? Currently, you are doing about 2.8%. How much do you think you can close your net interest margins at by FY13? A: In the beginning of the year, we had given some guidance from margins. We closed last financial year at 2.68%. We had given a guidance of 3%. Now we have moved to 2.76% and I am confident going forward we will be crossing 3% margin for FY13.