An over 70 per cent increase in provisioning dragged down UCO Bank’s net profit 69 per cent, to Rs 102 crore, for the quarter ended December 31, 2012.
Provisioning for non-performing assets and other employee liabilities swelled to Rs 728 crore against Rs 420 crore in the year-ago period.
On a sequential basis, profits remained almost flat, from Rs 104 crore during the quarter ended September 30, 2012.
According to S. Chandrasekharan, Executive Director, UCO Bank set aside nearly Rs 417 crore as provisioning towards NPA (non-performing assets) during the period under review.
Gross NPAs as a percentage of advances increased to 5.53 per cent (3.49 per cent), while net NPAs increased to 3.32 per cent (2.04 per cent). On a sequential basis also, net NPAs were up, compared with 2.94 per cent during the July-September quarter.
The bank witnessed fresh slippages amounting to Rs 1,200 crore during the quarter primarily driven by smaller accounts, Chandrasekharan said. The rise in bad loans affected the bank’s profitability dragging down the net interest margin to 2.3 per cent (2.89 per cent).
“Moving forward margins will improve as we expect fresh slippages to come down and recovery from bad assets to boost our bottomline,” he said.
The bank aims to achieve NIM of close to three per cent by the end of this fiscal.
Capital adequacy ratio stood at 13.19 per cent (12.33 per cent) as on December 31, 2012.
The bank is hopeful of getting Rs 681 crore worth capital from the Government as preferential equity within the next one month.
The bank has called for an extra-ordinary general meeting of shareholders on March 4 to seek approval for preferential share allotment to the Government.
UCO Bank’s share closed at Rs 67.80, down 5.11 per cent on the BSE on Tuesday.