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Having posted improvement in asset quality and profitability for four subsequent quarters starting March 2020, UCO Bank is hopeful of coming out of the Prompt Corrective Action (PCA) measure of the Reserve Bank of India.
According to Atul Kumar Goel, MD and CEO, UCO Bank, now that the bank has been able to adhere to all four parameters required to come out of PCA for four subsequent quarters, it has urged the RBI to consider taking it out of the framework.
Improvement in profitability
Riding on the back of a higher net interest income, UCO Bank registered a net profit of ₹35 crore for the quarter ended December 31, 2020, compared to a net loss of ₹960 crore during the same period last year.
On a sequential basis, net profit was up by nearly 17 per cent from ₹30 crore during the quarter ended September 30, 2020.
Net interest income grew by 14 per cent to ₹1,408 crore during the quarter under review compared with ₹1,237 crore in the same period last year. Operating profit was up by 10 per cent at ₹1,334 crore (₹1,210 crore).
Other income was up by 16 per cent at ₹864 crore (₹743 crore).
The percentage of gross non performing assets (NPA) to total advances declined to 9.8 per cent during the quarter under review against 19.45 per cent in the same period last year. Net NPA came down to 2.97 per cent (6.34 per cent).
Provision coverage ratio improved to 91.22 per cent during the quarter under review against 83.71 per cent in the same period last year.
Total deposits increased by seven per cent to ₹20,2421 crore, while advances grew by around three per cent to ₹11,6797 crore.
Despite a marginal decrease in yield on advances and a higher cost of funds, the bank has witnessed a growth in net interest margin to 2.86 per cent (2.62 per cent), said Goel.
The bank’s capital adequacy ratio stood at 12.08 per cent.
“We are comfortable on the capital front till March 2021. We have board approval to raise around ₹3,000 crore and we are looking for an opportune time to raise around ₹1,000 crore via QIP. We are in the process of appointing merchant bankers for the same,” he said.
On Monday, the bank’s scrip closed at ₹13.08, up by 1.55 per cent on the BSE.
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