Earnings Review
Interest income lifts UCO Bank's PAT; high provision weighs
This story was originally published at 18:47 IST on 28 April 2025
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--UCO Bank: Jan-Mar net interest income INR 26.98 bln, up 23.4% YoY
--UCO Bank: Jan-Mar global net interest margin 3.00%
--UCO Bank: Retail advances at INR 542.55 bln as on Mar 31, up 35.1% YoY
--UCO Bank: Total deposits at INR 2.94 tln as on Mar 31, up 11.6% YoY
--UCO Bank: Gross advances at INR 2.20 tln as on Mar 31, up 17.7% YoY
--UCO Bank: Hold INR 1.97 bln provision on account of expected credit loss
--UCO Bank: Held INR 5.30-bln COVID-19 related provision as on Mar 31
--UCO Bank FY25 total income INR 294.74 bln vs INR 251.20 bln year ago
--UCO Bank FY25 net profit INR 24.45 bln vs INR 16.54 bln year ago
--UCO Bank provision coverage ratio at 96.69% as on Mar 31
--UCO Bank board OKs raising INR 27 bln via equity in FY26
--UCO Bank Basel-III capital adequacy ratio 18.49% as on Mar 31
--UCO Bank to pay INR 0.39 per share dividend
--UCO Bank net NPA ratio 0.50% as on Mar 31 vs 0.63% qtr ago
--UCO Bank gross NPA ratio 2.69% as on Mar 31 vs 2.91% qtr ago
--UCO Bank Jan-Mar total income INR 81.37 bln vs INR 69.85 bln year ago
--UCO Bank Jan-Mar net profit INR 6.52 bln vs INR 5.26 bln year ago
--UCO Bank Jan-Mar net profit INR 6.52 bln
By Pratiksha
NEW DELHI – UCO Bank's net profit for the March quarter rose on year on account of a jump in interest income. However, a sharp rise in the lender's provision ate into its bottom line. The Kolkata-based lender's net profit in Jan-Mar rose 24.09% on year to INR 6.52 billion. Sequentially, the net profit was up 2.1%.
The state-owned bank's total income rose 16.5% on year to INR 81.37 billion during the reporting quarter, primarily due to an 15.1% on-year jump in interest income to INR 67.45 billion. In Jan-Mar, the lender's net interest income--the difference between interest earned and expended--rose 23.4% on year to INR 26.98 billion.
Provisions, excluding tax, and contingencies jumped 41.8% on year to INR 6.63 billion in Jan-Mar. Of these, provisions for non-performing assets rose 60.4% on year to INR 3.64 billion.
As on Mar. 31, the bank held a provision of INR 1.97 billion towards forward looking provision on account of expected credit loss and INR 5.30 billion for COVID-19 related contingencies.
As a result, the bank's net non-performing asset ratio fell to 0.50% as of Mar. 31, against 0.63% at the end of the previous quarter, and 0.89% at the end of March 2024. The gross NPA ratio of the bank was 2.69% as on Mar. 31, compared with 2.91% as of Dec. 31, and 3.46% as of Mar. 31, 2024. Both the metrics were in line with the bank's guidance for the financial year. The bank has now guided for a net NPA ratio for FY26 at less than 0.35% and gross NPA ratio at below 2.50%.
The bank's provision coverage ratio, including write-offs, rose to 96.69% as of Mar. 31 from 96.16% at the end of the previous quarter and 95.38% at the end of March 2024. The slippage ratio during the quarter was 1.08%, in line with the the lender's guidance and much higher than 0.67% in the previous quarter. The bank has guided for slippage ratio of 1.0-1.25% in FY26.
The bank's global net interest margin in Jan-Mar was 3.00%, down from 3.17% in Oct-Dec. The net interest margin for FY25 was 3.08%, in line with the bank's guidance of 3.00-3.10%. The lender retained its guidance for FY26.
The bank's gross advances at the end of March quarter were INR 2.20 trillion, up 17.7% on year, while deposits were INR 2.94 trillion, up 11.6% on year. The lender has guided for a deposit and credit growth for FY26 at 10-12% and 12-14%, respectively.
As of Mar. 31, the lender's credit-deposit ratio was 74.94%, higher than the 71.02% a year ago. The lender's guidance for credit-deposit ratio for FY26 is at 75-77%.
As of Mar. 31, retail advances were at INR 542.55 billion, up 35.1% on year, backed by growth in home loan and vehicle loan portfolio. Agriculture advances registered a growth of 20.0% on year to INR 295.75 billion.
Cost of deposits in the March quarter was 4.90%, marginally higher than 4.82% in the year ago period. The state-run bank's current account, savings account ratio was 37.91% at the end of March.
The bank's capital adequacy ratio was 18.49% as of Mar. 31. In FY25, UCO Bank's net profit rose to INR 24.45 billion from INR 16.54 billion a year ago, while total income increased to INR 294.74 billion from INR 251.20 billion a year ago.
The lender declared a final dividend of INR 0.39 per equity share for FY25. The bank's board also approved raising INR 27 billion at face value of INR 10 per share through various equity modes like qualified institutional placement or follow-on public offer among others in one or more tranches at an appropriate time and premium of equity in FY26.
On Monday, shares of UCO Bank ended 1.1% higher at INR 30.78. The lender announced its earnings post market hours. End
Edited by Akul Nishant AKhoury
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