More Stories

Informist, Friday, Oct. 17, 2025

--UCO Bank: Planning to expand, add more branches in next 6 months 

--CONTEXT: UCO Bank mgmt's comments at post-earnings media conference 

--UCO Bank: See rise in vehicle loans after GST cut 

--UCO Bank: See no impact of US tariffs, US export credit portfolio minimal 

--UCO Bank: No build-up of stress in bank's loan book 

--UCO Bank: Aim to open branches in southern, western parts of India 

--UCO Bank: No plan to raise funds via corporate bonds in Oct-Dec 

By Afra Abubacker and Vaishali Tyagi

NEW DELHI/MUMBAI – UCO Bank expects to maintain its global net interest margin within the guided range of 2.8-2.9% in the coming quarters, supported by a steady current account savings account ratio of 37-38% and easing cost of funds, the bank's management said in a post-earnings media call. For the September quarter, the bank had reported a global NIM of 2.90% and domestic NIM of 3.08%.

"There were two major contributors to our profitability, one is our net interest income growth of more than 10% and fee-based income growth," the management said. "We have given (NIM guidance) of 2.8-2.9% because there was a steep rate cut by RBI in the month of June, and we expect there can be another rate cut," it added. The RBI's Monetary Policy Committee has lowered the repo rate by 100 bps between February and June to 5.50%.

While lower borrowing rates may trim interest income, it is being offset by a decline in deposit costs, which have dropped quarter-on-quarter. The management expects the repricing of deposits in the December and March quarters to further improve NIM and maintain it in the range of 2.90% by FY26. 

The Kolkata-based bank reported a net profit of INR 6.20 billion for the quarter ended September, a mere 2.8% increase over the year-ago period. Compared with the previous quarter, the bottom line was up just 2.1%.  

A healthy growth in advances also supported the bank's net profit. UCO Bank's total advances rose 16.7% on year and 2.7% on quarter to INR 2.31 trillion as of Sept. 30. The bank's domestic advances grew 17.2% on year to INR 2.04 trillion.  

Interest income of the bank rose 7.6% on year to INR 65.37 billion. However, the rise in interest income was more than offset by an 11% fall in other at INR 8.84 billion in the reporting quarter. Net interest income rose 10% on year to INR 23.01 billion. The domestic net interest margin of the bank fell to 3.08% in the latest quarter from 3.18% a quarter ago and 3.30% a year ago. Total income of the bank rose just 5% on year to INR 74.21 billion in the reporting quarter. 

On US tariffs, the bank said this is unlikely to have any major impact on its export credit book, as its exposure to the US market is small. Exports to the US form only around 5% of its total export credit portfolio, mainly in sectors such as textiles, seafood, and carpets, the management said. The bank added that it is extending support to exporters facing shipment delays by allowing extensions in packing credit tenures.

In terms of asset quality, the gross non-performing asset ratio of the bank improved to 2.56% from 2.63% a quarter ago and 3.18% a year ago. The net NPA ratio was 0.43%, against 0.45% a quarter ago and 0.73% a year ago. The bank said there is no stress building in its loan book, and asset quality indicators remain stable. "If you look at our slippage ratio for the last two quarters in the range, it is within the guidance 1.00-1.25%," it said. The bank's slippage ratio improved to 1.05% in the September quarter from 1.18% a quarter ago. 

The bank's domestic advances remain dominated in the retail, agriculture, and micro, small, and medium enterprises segments. The bank said its corporate loan book is also sound, as over 80% of corporate accounts are well-rated at 'A' and above. "So, that way the corporate book is also sound. There are no immediate signs of any stress building up in any other book," it said. 

Following the cut in goods and services tax on automobiles, UCO Bank expects a pick-up in vehicle loan disbursals. The bank reported the highest growth in vehicle loans in the quarter at INR 60.14 billion, up 73% on year. Among other retail categories, personal loans rose over 50% on year, while home loans grew around 19%, the management said. 

UCO Bank plans to strengthen its physical presence in the next six months. "We have already planned around 150 branch expansions, pan-India basis...The major expansion will be in the southern and western side of the country," including Tamil Nadu, Kerala, Karnataka, Hyderabad, Maharashtra, and Gujarat, the management said.

The bank said it has no plan to raise funds through corporate bonds during the Oct–Dec quarter, as its capital position remains strong. The management said the capital adequacy ratio stood at 17.9%, with tier-I capital at 15.9% as of September-end. 

For Apr-Sept, the state-owned lender reported a net profit of INR 12.27 billion, up 6.4% on year. Total income for the same period was INR 148.55 billion up 6.6% on year. Post the announcement of its earnings on Friday, shares of the bank closed 1.7% lower at INR 30.89 on the National Stock Exchange.  End

Edited by Avishek Dutta

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.