Oriental bank of Commerce [Get Quote] hopes to wipe out the losses accruing to it on account of the takeover of Global Trust Bank by the end of 2006-07.

OBC is banking on recovering Rs 350 crore (Rs 3.5 billion) through tax gains. The government is expected to grant benefits under section 72 A of the Income Tax Act to help OBC write-off a part of the losses. The government is expected to provide tax benefits for banks in the Budget.

The bank's chairman and managing director BD Narang said it had already recovered non-performing assets amounting to Rs 100 crore (Rs 1 billion), which were on GTB's books. Another Rs 100 crore is expected to be recovered over the next quarter.

Loans amounting to Rs 400 crore (Rs 4 billion), which had been extended by GTB, have also been restructured, he said. The bank is also planning legal action to recover the dues from certain GTB borrowers.

"The operating loss (on GTB's account) will be over by the first quarter of the next financial year and we hope to post an operating profit of around Rs 150 crore (Rs 1.5 billion) by the end of the year," Narang said.

He said OBC had set itself a target of generating a business of Rs 1,00,000 crore (Rs 1000 billion) by 2006 and intended to post an operating profit of Rs 2,000 crore (Rs 20 billion). The bank hopes to service a million customers annually.

"The bank will be totally networked and the surplus manpower will be deployed in states like Bihar, Orissa and Jharkhand, where we have a smaller presence," Narang added.

He said OBC was not looking for any more takeovers for the time being. OBC is planning to hit the markets with a public offer of public offer of 50 million shares at a premium. It is approaching the government and the Reserve Bank of India [Get Quote] for regulatory approvals.