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UCO Bank’s net profit dipped to ₹103.53 crore in the second quarter ended September 30, from ₹400.20 crore in the corresponding previous quarter. Higher provisions for non-performing assets at ₹398 crore in Q2 of 2014-15, against ₹324 crore of Q2 of 2013-14, resulted in lower profits. Recognition of interest income on cash basis against accrual basis, in compliance with Accounting Standard 9, also caused a reduction in profit by ₹155 crore, said Jai Kumar Garg, Executive Director of the UCO Bank.
The net NPA figure during the quarter moved up to ₹4,388.66 crore, from ₹4,228.22 crore in the corresponding quarter last year. Slippage of assets in the infrastructure sector — mainly power and steel — worth ₹2,100 crore were major reasons for fresh NPAs in the quarter. “Half of the total slippages in the Q2FY15 were caused by restructured assets,” the bank said. Net NPA ratio to total loan portfolio stood at 3.15 per cent, against 3.13 per cent a year ago.
Global advances of the bank, at ₹1,43,163 crore grew 3.2 per cent, while domestic advance improved by 4.53 per cent at ₹1,29,706 crore. UCO Bank’s global business is dominated by India-Iran rupee trade settlement account. This account contributes largely to the bank’s overall profitability. UCO is the only bank that settles Indo-Iranian rupee trade, chiefly made up of crude oil imports by public sector refiners and oil marketers.
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