The Hindu Business Line : Higher provisioning pulls down UCO Bank’s Q3 net

Kolkata, Jan. 25 During the quarter ended December 31, 2007, UCO Bank posted a lower net profit of Rs 82.78 crore as compared to Rs 122.95 crore in the same period last year.

Mr S.K. Goel, Chief Managing Director of UCO Bank, while briefing newspersons about the bank’s performance in the third quarter of the current fiscal, would attribute the drop to higher provisioning — Rs 22 crore in respect of some accounts which had been upgraded as per norm and another 34 crore on account of MAT.

The operating profit during the period amounted to Rs 197.58 crore (Rs 231.38 crore).

The net interest income amounted to Rs 378 crore (Rs 415 crore) and other income Rs 149 crore (Rs 113 crore). The treasury income was Rs 67 crore (Rs 24 crore) and fee-based income Rs 52 crore (Rs 46 crore). The net interest margin was 1.9 (2.42).

The advance growth during the period was a little more than six per cent which, though higher than that in the first six months, was considerably lower than the 22 per cent growth stipulated for 2007-08 in the MoU the bank signed with the Union Government.

Cumulatively, till December 31, 2007, the growth had been a little more than 16 per cent at Rs 49,860 crore (Rs 42,935 crore). UCO Bank, Mr Goel hoped, would post a higher deposit growth in the last quarter. The deposit growth at Rs 72,402 crore (Rs 58,232 crore) was more than 24.33 per cent.

NPA ratio

The net NPA ratio was 2.37 per cent ( 2.17 per cent) and gross NPAs ratio 3.33 per cent (3.23 per cent). “In certain areas ravaged by natural calamities, the bank had to go slow over the recovery drive at the insistence of the respective State governments,” Mr Goel explained.

“By 2009, we would like to bring down the gross NPAs ratio to two per cent and net NPAs ratio to one per cent”.

He hoped that the capital restructuring proposal would receive government approval any day, pointing out that the bank proposed to enter the capital market with a public issue by March. By that time, he felt, the market would stabilise.

QIB issue

There could be an issue for the QIBs also, he said. As per the restructuring proposal, the present equity size would be reduced by Rs 300 crore to around Rs 500 crore. “It will leave us with a headroom of Rs 90 crore, which will be the equity size plus premium,” he said.

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