Targets Rs 1 lakh cr business this year.
KOLKATA: Oriental Bank of Commerce (OBC) is mulling raising hybrid capital towards the second half of the current fiscal. It aims to focus on recoveries in its endeavour to achieve a business of Rs 1 lakh crore this year.
Moreover, the bank is planning to open a representative office in Dubai.
OBC has already raised Rs 500 crore of Tier II capital recently. Given its capital adequacy at 12%, the bank may not raise capital immediately. While it does have some headroom on its Tier II front, OBC is contemplating raising some hybrid capital, which has characteristics of both debt and equity. It is, however, yet to take a decision on this.
Having notched a net profit of Rs 803 crore for 2005-06, OBC is betting on a 18-20% growth in business in the current year. The bank, which ended the year with a total business of around Rs 80,000 crore, is gunning for Rs 1 lakh crore business this time.
"We are in the process of reshuffling our portfolio. The focus will be on core banking, apart from retail and mid-corporate business. We hope to net a four figure profit this year if everything goes well," K N Prithviraj, chairman and managing director, OBC told DNA Money.
OBC is also working up strategies to speed up recoveries this year.
"The main plank for our growth strategy will be recoveries this year. We recovered about Rs 900 crore in 2005-06, which included Rs 200 crore as write-off. The net NPA was about 0.49%, which is slated to come down further this year," the CMD said.
OBC is also planning to have its first-ever overseas presence in Dubai. This will in addition to the proposed three-way (with Bank of Baroda and Bank of Maharashtra) joint venture in Malaysia which was first reported by DNA Money on April 24. While the bank has already received the RBI permission, the foreign regulatory permission is awaited.
