Riding on the back of a higher net interest income and other income, UCO Bank posted 110 per cent growth in net profit at ₹653 crore in the third quarter of FY23, as against ₹310 crore in the year-ago period.

This is the highest-ever quarterly net profit in the bank’s 80 years of history.

Net Interest Income (NII) increased nearly 11 per cent to ₹1,952 crore (₹1,763 crore), fuelled by healthy growth in loan book and improved yield on advances. NII includes an exceptional interest income due to recovery in the account of Air India to the tune of around ₹200 crore, said Soma Shankara Prasad, MD & CEO. If excluded, the NII growth stands at 25 per cent.

The net interest margin (NIM) stood at 2.99 per cent (2.84 per cent in Q2 FY23; 3.03 per cent in Q3 FY22).

Other income increased by nearly 15 per cent at ₹823 crore as against ₹719 crore last year, aided by robust recovery in written off accounts and commission from third party products.

Loan book

The bank’s loan book grew by nearly 20 per cent at ₹1,51,059 crore as on December 31, 2022, backed by a healthy demand for credit from retail, corporate and agriculture sectors. The credit demand is expected to continue moving forward, Prasad said.

The gross NPA as a percentage of advances reduced to 5.63 per cent (8 per cent) while net NPA reduced to 1.66 per cent (2.81 per cent). Provision coverage ratio increased to 93.58 per cent as on December 31, 2022, from 91.30 per cent last year.

The bank’s scrip closed at ₹29.45, down 3.28 per cent on the BSE on Tuesday.

Rupee trade

Speaking to media, Prasad said the rupee payment mechanism is yet to witness actual transactions happening as trade invoicing is still not taking place in rupee terms. According to him, while the infrastructure has been put in place and accounts have been opened, actual transactions have not yet happened.

“We have had several meetings and sessions with exporters, IBA and other stakeholders. This requires some amount of coordination between business people of two countries and for government to see that invoicing happens in rupee terms,” Prasad said.

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