The Hindu Business Line : UCO Bank H1 net dives to Rs 143 crore

Mr V. Sridar (left), Chairman, UCO Bank, and Mr B. K. Datta, Executive Director, at a press conference at the bank's head office in Kolkata on Monday. -- A. Roy Chowdhury

Kolkata , Oct. 31

UCO Bank has reported a net profit of Rs 143 crore for the first half of 2005-06, a whopping Rs 140-crore decline when compared to that in the corresponding period of the previous year.

The bank's year-on-year operating profit dropped by over Rs 100 crore from Rs 438 crore as of September 2004 to Rs 326 crore.

This is on account of a lower profit on sale of investments, higher amortisation expenses and higher staff costs (following a salary revision).

The drop in net profit is also partly due to a provision of Rs 167 crore made for mark-to-market depreciation on transfer of securities to HTM (held-to-maturity) category.

UCO Bank, said Mr V. Sridhar, CMD, has seen a 9-per cent plus increase in total revenue, excluding income from treasury operations, compared to that in the corresponding half-year of the previous fiscal.

The bank witnessed a 24.5-per cent growth in business during the first half; its total business stood at nearly Rs 81,000 crore as on September 30, 2005, up from Rs 65,000 crore in the first half of 2004. It also reported a reduction in overall NPAs.

As on September 30, 2005, gross NPAs decreased to 4.23 per cent compared to 5.7 per cent in September 2004, while net NPAs stood at 2.62 per cent (down from 3.09 per cent).

UCO Bank, the CMD said, hoped to reduce its net NPAs further to less than 2 per cent by March next year.

On another front, it will try to scale up its credit-deposit ratio to about 65 per cent by the end of the current fiscal; the CD ratio now stands at around 62 per cent.

The bank's board hopes to receive and discuss consultant BCG's report by early next year. It also plans to finalise its core banking solution vendor by end-November. Meanwhile, there are plans to foray into overseas markets such as Dubai, Bangladesh and Sri Lanka.

Plans Tier II bonds: UCO Bank has decided to tap the market to raise Rs 400 crore tier II capital this year. This will be done in the months ahead, Mr Sridhar told newspersons on Monday while announcing the bank's results.

The bank plans to issue bonds to achieve its targets.

The details of the instrument have not been finalised at this stage.

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