Money & Banking

UCO Bank posts ₹21-cr Q1 profit

Our Bureau Kolkata | Updated on July 31, 2020 Published on July 31, 2020

UCO Bank posted a net profit of ₹21 crore for the quarter ended June 30, 2020, when compared to a net loss of ₹601 crore in the same period last year. On a sequential basis, net profit is up by 23 per cent from the ₹17 crore registered in the quarter ended March 31, 2020.

The net interest income was down by 5 per cent to ₹1,267 crore during the quarter under review against ₹1,335 crore in the same period last year. Other income was up by 23 per cent to ₹774 crore (₹630 crore).

According to Atul Kumar Goel, MD and CEO, UCO Bank, having successfully made a turnaround, the bank is now on a growth path. It expects a credit growth of around 5 to 10 per cent in FY21.

“Despite the current situation we managed to disburse close to ₹3,000 crore in the June quarter. Even if we can maintain disbursements at these levels then we should be able to post 5 to 10 per cent growth in credit this fiscal. But we expect the situation to improve moving forward,” Goel told newspersons at an e-conference while sharing the bank’s performance during the quarter.

UCO Bank expects demand to come from the retail sector, particularly housing, car and gold loans.

Bad loans

The percentage of gross non-performing assets (NPA) declined to 14.38 per cent (24.85 per cent) and the net NPAs came down to 4.95 per cent (8.98 per cent).

Talking about asset quality, he saidthere might not be any big ‘lumpy’ account turning into non-performing asset (NPA) moving forward. Nearly 75 per cent of its accounts, both in terms of number as well as amount, across MSME, corporate, agriculture and retail sectors have made payments, while only around 25 per cent continue to avail the moratorium.

“Any impact of the moratorium on the 25 per cent of accounts will only be visible in the third quarter (October to December) of this fiscal. However, we do not expect any big lumpy account to turn into an NPA,” he said.

The bank is quite comfortable with a provision coverage ratio of more than 86 per cent.

UCO Bank has taken the approval of its board to raise capital close to ₹3,000 crore to fund its growth needs this fiscal. It is awaiting shareholders’ approval for the same. The bank’s capital adequacy ratio stood at 11.65 per cent as on June 30, 2020.

“We are waiting for an opportune time to raise capital. We will explore all possible avenues, including tapping the government infusion as well as Employee Stock Purchase Scheme for raising capital,” he said.

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Published on July 31, 2020
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