A substantial rise in treasury and other income saw Kolkata-headquartered UCO Bank report a near 50 per cent jump in net profit to Rs 156 crore (approx) for the second quarter ending September 30, 2015. Profits in the corresponding period last year stood at Rs 104 crore.
Total income of the bank increased marginally to Rs 5,308 crore during the quarter from Rs 5,257 crore during the same period of 2014-15.
Treasury operations recorded a profit of Rs 273 crore (Rs 117 crore) from sale of investment and exchange transactions, according to RK Takkar, Managing Director & Chief Executive Officer, UCO Bank said.
Other income increased 15 per cent y-o-y to Rs 411 crore (Rs 359 crore) in the second quarter of this fiscal.
“In the coming quarters we expect substantial contribution and profits from the treasury operations of the bank,” he told mediapersons.
Domestic NIM (or net interest margin) stood at 2.45.
Advances
The PSU-lender, however, saw a near stagnation in advances. Advances for the quarter ending Sept 30, stood at Rs 143,598 crore ( a 0.3 per cent growth).
According to Takkar, the bank had made a conscious decision to contain large corporate advances. Focus continues to be on retail business (loans), agriculture and the micro, small and medium enterprises segments.
“We expect a 15-20 per cent growth in advances this year to the retail, agricultural and SME segments,” he said.
Asset Quality
Asset quality, during the quarter slipped further.
UCO Bank saw its gross non-performing assets (NPAs) rise to 8.51 per cent (of gross advances) or Rs 12,227 crore. In the corresponding quarter last fiscal gross NPAs stood at 5.20 per cent or Rs 7,447 crore.
The net NPAs too increased to 5.15 per cent (or Rs 7123 crore) during the second quarter, up from 3.15 per cent (or Rs 4,389 crore) a year ago.
During the quarter, fresh slippages were to the tune of Rs 1,876 crore. Provisioning for NPAs stood at Rs 863 crore.
According to the bank’s MD and CEO, in the first six months of the fiscal, the lender sold bad assets worth Rs 116 crore (apprx) to asset reconstruction companies.