Public sector lender Oriental Bank of Commerce has reported a 2.37% decline in its net profits for the first quarter of the current fiscal.

The net profits of the bank for Q1 stood at Rs 354.70 crore as compared to Rs 363.72 crore for the same period in the fiscal prior to this.

The reason for this dip has been due to increase in cost of deposits at a rate faster than yield on advances.

"The increase in cost of deposits has been much more because of some deposits taken in last quarter of last financial year. All those are coming for re-pricing. Also interest rates are correcting. We will certainly be able to maintain year end guidance of NIM of 3 per cent", Mr Nagesh Pydah, Chairman & Managing Director said.

However income from other sources including trading profit of Rs 71.68 crore from treasury operations and income of Rs 47.91 crore from forex transactions aided in improving the final financial figures for the bank in this quarter.