The Hindu Business Line : UCO Bank plans Malaysia foray

The Kolkata-based bank will initially leverage its Singapore operations, which cater to clients doing business in countries such as Malaysia and Indonesia.

UCO was in a way already involved in Malaysia for long, said Mr V.P. Shetty, CMD, referring to its holding in a local outfit named Commerce Shareholding. The bank holds 4.5 million shares in it and has been availing of bonus issues. There were no immediate plans to change the nature of this holding, he said, adding that the bank currently saw it as a rewarding investment.

"The plan is to start with representative offices in the newly emerging areas. Our Singapore branches will begin to identify businesses in these markets and monitor developments," he told newspersons.

UCO has recorded a net profit of Rs 134 crore for the quarter ended December 31. The operating profit stood at Rs 212 crore. The rise in profits has been attributed to improvement in certain key areas, including a 42-per cent increase in net interest income and a reduction in total non-interest expenses during the quarter.

Gross business of Rs 51,500 crore was achieved, up from Rs 44,000 crore as on December 2002. The bank has been able to increase its market share to 2.13 per cent.

The deposit and advances growth of the bank on a year-on-year basis was 16.87 per cent and 16.98 per cent respectively. Loans to the `mid-market segment' (read retail) have picked up by Rs 804 crore. The net NPA ratio came down to 4.06 per cent as on December 2003 from 4.64 per cent in end-2002. UCO's capital adequacy stood at 13.27 per cent, up from 11.57 per cent in December 2002.

During the nine-month period ended December last year, the bank has posted an operating profit of Rs 702 crore as against Rs 464 crore during the corresponding period of 2002, a 52 per cent growth. Net profit during the same period was Rs 426 crore, against Rs 289 crore in the corresponding period, a 47 per cent increase.

UCO has, meanwhile, proposed to raise Tier II capital — Rs 250-400 crore — within the next three months. This will help boost its capital adequacy. On another front, it has started recruiting specialist personnel in a big way. Mr Shetty referred to 250 officers who have been newly employed — to which more will be added shortly. Many of these officers are involved in functions like information technology, risk management, treasury etc.

The bank, aware of changing investors' preferences, is considering introduction of services related to the capital market.

These include IPO funding and loans-against- shares. Both areas were developing fast, Mr Shetty noted.