Oriental Bank Q2 PAT may dip 20.2% at Rs 241 cr: MOST

Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the banking sector. The brokerage house expects Oriental Bank of Commerce to report a 31.8 percent plunge quarter-on-quarter (down 20.2 percent Y-o-Y) in net profit at Rs 241 crore.

Net interest income of Oriental Bank of Commerce expected to decrease by 1.2 percent Q-o-Q (up 11.6 percent Y-o-Y) to Rs 1,291.2 crore, according to Motilal Oswal. Motilal Oswal's Report on Oriental Bank of Commerce: Loan and deposit growth each is expected to be lower than the industry average at 11 percent Y-o-Y. Expect pressure on cost of funds to translate into lower NIM - building 6-7bp of sequential decline. Asset quality is expected to remain under pressure. Hence, factored a net slippage ratio of 1.8 percent v/s 1.3 percent in 1QFY14 and credit cost of 1.2 percent v/s 1.1 percent in 1QFY14. At end-1QFY14, AFS as a proportion of overall investment stood at 42 percent, with a duration of 4.5 years. And with an increase in G-sec yields, the broking firm factor a net investment loss of INR 100 million v/s gain of INR 1.7 billion in 1QFY14. Overall, the firm has lowered the earnings estimate by 8/13 percent for FY14E/15E to factor lower margins and loan growth. Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.