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Informist, Tuesday, Jan. 21, 2025

 

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--UCO Bank: Oct-Dec slippage ratio 0.92% vs 1.84% qtr ago 
--UCO Bank: Oct-Dec cost of deposits 4.90% vs 4.88% qtr ago, 4.91% year ago 
--UCO Bank: CASA ratio at 37.97% as on Dec 31 vs 38.24% quarter ago 
--UCO Bank: Oct-Dec net interest margin 3.17% vs 3.10% in Jul-Sept 
--UCO Bank: Oct-Dec net interest income INR 23.78 bln, up 19.62% on year 
--UCO Bank: Retail advances at INR 500.55 bln as on Dec 31, up 31% on year 
--UCO Bank: Total deposits at INR 2.80 tln as on Dec 31, up 9.36% on year 
--UCO Bank: Gross advances INR 2.09 tln as on Dec 31, up 16.44% on year 
--UCO Bank provision coverage ratio at 96.16% as on Dec 31 
--UCO Bank Apr-Dec total income INR 213.37 bln vs INR 181.35 bln year ago 
--UCO Bank Apr-Dec net profit INR 17.93 bln vs INR 11.28 bln year ago 
--UCO Bank Basel-III capital adequacy ratio 16.25% as on Dec 31 
--UCO Bank Oct-Dec NPA provisions INR 2.63 bln vs INR 1.16 bln year ago 
--UCO Bank Oct-Dec provisions INR 5.90 bln vs INR 3.42 bln year ago 
--UCO Bank net NPA ratio 0.63% as on Dec 31 vs 0.73% qtr ago, 0.98% yr ago 
--UCO Bank gross NPA ratio 2.91% as on Dec 31 vs 3.18% qtr ago, 3.85% yr ago 
--UCO Bank Oct-Dec total income INR 74.06 bln vs INR 64.13 bln year ago 
--UCO Bank Oct-Dec net profit INR 6.39 bln vs INR 5.03 bln year ago 
 

 

By Priyasmita Dutta

 

NEW DELHI – UCO Bank Tuesday reported a healthy growth in its net profit for the December quarter, driven by robust net interest income and a sharp rise in other income. The Kolkata-based lender's asset quality also improved during the quarter.

 

The bank's net profit for Oct-Dec rose 27.05% on year to INR 6.39 billion. Sequentially, the net profit was up 6.0%. Net interest income for the quarter was INR 23.78 billion, up 20% on year, on the back of steady growth in the bank's business.

 

Net interest margin as on Dec. 31 was 3.17%, up from 3.10% as on Sept. 30. The net interest margin was higher than the bank's guidance of 2.9-3.0% for the year.

 

Shares of the state-owned bank turned positive right after the financial results were out, but closed the day 1% lower at INR 44.09 on the National Stock Exchange.

 

The bank's gross advances at the end of December quarter were INR 2.09 trillion, up 16.4% on year, while deposits were INR 2.80 trillion, up 9.36% on year. As of Dec. 31, the lender's credit-deposit ratio was 74.45%, higher than the 69.93% a year ago. Retail deposits were at INR 500.55 billion, up 31.01% on year.

 

The divergence in the growth of advances and deposits comes at a time when the Reserve Bank of India and the finance ministry have said banks need to establish a healthy balance between the growth rate in their credit disbursal with that of their deposit collections. Ashwani Kumar, managing director and chief executive officer of UCO Bank, said the bank has undertaken many customer-friendly initiatives to improve deposits and garner long-term customers through diversified services. Cost of deposits in the December quarter was 4.90%, marginally lower than 4.91% in the year ago period.

 

The state-run bank's current account, savings account ratio was 37.97% at the end of December, it said in an investor presentation. Total income for the December quarter was INR 74.06 billion, up 15.5% on year and 4.7% sequentially. For Apr-Dec, the bank posted a net profit of INR 17.93 billion, up 58.9% from year ago. Total income for the period was INR 213.37 billion, up 17.7% on year.

 

UCO Bank's other income included fee-based income, recovery from loans that were written off, and treasury income. Fee-based income and recovery from written-off loans rose 21.7% and 15.8% on year, respectively. The bank made a profit of INR 1.45 billion on Treasury investments in the quarter ended December against at loss of INR 240 million in the year ago quarter.

 

The bank's bottom line was impacted as provisioning against bad loans for Oct-Dec rose INR 2.63 billion, up 126.4% on year. Sequentially, the provisioning was lower by 56.8%. Kumar said the bank is identifying a few accounts which may see some stress and it has increased provisioning for the same. "Any bad loans, or provisioning requirements are divided among all segments --- retail, agriculture, and MSME," he said.

 

The net NPA ratio of the bank improved to 0.63% at the end of December, from 0.73% a quarter ago; and the gross NPA ratio improved to 2.91% from 3.18% a quarter ago. Its capital adequacy ratio as per Basel III norms was 16.25% as of Dec. 31, down from the 16.84% end of September. The non-performing loan provision coverage ratio was 96.16% as of Dec. 31. The slippage ratio during the quarter was 0.92%, much lower than 1.84% quarter ago.  End

 

Edited by Subhojit Sarkar

 

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