Monday, December 22, 2008

CMP Rs 157.70 Book Value Rs 231 EPS Rs 33.60 NPA 1% RoE 14.8%
(2008 figures)

  • OBC, established in the year 1943, is a state owned bank with government ownership at 51.1%. As on 31st March 2008, it has a balance sheet size of Rs. 909 bn with deposits at Rs. 779 bn and advances at Rs. 546 bn. All the 1323 branches of the bank are under Core Banking Solutions. OBC has a predominant presence in metro and urban centres with 55% of its branches in these centres.
  • Alliance with Indian Bank and Corporation Bank
  • The bank has entered into an alliance with Indian Bank and Corporation Bank for building E Payment systems, sharing of IT and Treasury resources, bancassurance,business syndication and sharing of training resources and common procurement of IT and other assets where feasible.
  • Life insurance joint venture with Canara Bank and HSBC
  • OBC has entered into a joint venture for life insurance business with Canara Bank and HSBC Insurance (Asia Pacific). Canara Bank would be holding 51%, HSBC 26% and OBC would hold the remaining 23%.
  • GTB losses a thing of the past
  • Post its merger with erstwhile Global Trust Bank, the bank had to take a hit on its net worth. The bank has been providing Rs. 2.4 bn. per annum on account of write off of GTB losses. However, in FY08, the bank has written off the entire losses with the result that the bank would not have to take further hit on its profits going forward.
  • Short-term goals for the company
  • 100 new branches to be opened in current year and increasing customer base, thrust for business into Semi-urban and rural areas, creat branch network of 1500 branches by March 2010.

The stock is moving up with very good delivery volumes. It broken out and can target 195-200 levels in next 3-4 months. One can keep SL of 140.

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