UCO Bank net profit rises to ₹285 crore in Q4

UCO Bank has reported a 144 per cent rise in net profit at ₹1,511 crore in 2013-14.

The public sector lender announced a final dividend of 10 per cent. Earlier it had announced an interim dividend of 20 per cent.

The bank’s profit for the January-March quarter stood at ₹285 crore, compared with ₹50 crore in the year-earlier quarter.

Improvement in operational metrics and decline in the cost of funds pushed up the operating profit, said Arun Kaul, CMD.

Operating profit for the full year rose 47.6 per cent to ₹4,940 crore. The March quarter operating profit stood at ₹1,372 crore (₹1,032 crore).

Net interest income during the fiscal went up 32.25 per cent to ₹6,059 crore, while the bank’s non-performing assets (NPAs) stood at ₹3,556 crore as on March 31.

Iran trade payment

According to S Chandrasekharan, Executive Director, India’s trade with Iran through a rupee payment mechanism made a significant contribution to the net profit.

UCO Bank has been the sole settlement bank for Indo-Iran trade since 2012 after it became impossible for India to deal with Iran through international banking channels following the Western sanctions on the West Asian country over its controversial nuclear programme.

The bank, however, did not divulge the income or profit figures from the Iran trades.

Interest income

According to sources, Iran maintained an interest-free rupee deposit account of over ₹20,000 crore in 2013-14 with UCO Bank for Indian export payment settlements.

Interest income from this deposit as well as various fees charged by banks for the Iran trades had been a significant contributor to UCO Bank’s profit last year.