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Riding on the back of a rise in non-interest income and lower cost of funds, UCO Bank posted 41 per cent growth in net profit to Rs 511 crore for the quarter ended June 30, 2013.
The net profit stood at Rs 362 crore during the same period last year.
On a sequential basis, profits during Q1 FY14 zoomed ten-fold from around Rs 50 crore during the January-March 2013 quarter. The drop in profit during Q4 FY13 was due to higher provisioning for stressed assets.
According to Arun Kaul, Chairman and Managing Director of UCO Bank, cost of deposits during the quarter under review came down to 6.16 per cent (7.16 per cent). Yield on advances also came down to 9.77 per cent (11.32 per cent) following a reduction in the base rate.
“We have been able to reduce our cost of funds by mobilising more CASA (current account, savings account) deposits and by shedding high-cost bulk deposits,” Kaul said at a press meet.
CASA deposits, which grew by 57 per cent, currently account for 35 per cent of its total deposits against 25.6 per cent during the year-ago period.
Other income grew by 98 per cent to Rs 462 crore. Of this, nearly Rs 234 crore came from treasury trading profits, Kaul said.
Loan Quality
There has been an improvement in the bank’s asset quality during the first quarter. Slippages were lower at Rs 629 crore during the current quarter, against the average slippage of Rs 1,300-1,400 crore during the last three quarters of FY13.
The bank expects its asset quality to improve this fiscal.
Gross non-performing assets (NPA), as a percentage of advances, increased to 5.58 per cent (3.88 per cent) while net NPAs increased to 3.15 per cent (2.23 per cent).
The bank recognised minimum alternative tax (MAT) credit to the extent of Rs 147.42 crore for the April-June quarter.
Net interest margin (NIM) declined to 2.42 per cent (2.58 per cent). The bank aims to achieve NIM of 3 per cent by the end of this fiscal.
Capital adequacy ratio stood at 13.72 per cent (12.33 per cent). The bank has approached the Union Government for funds to the tune of Rs 2,000 crore.
Shares of UCO Bank closed at Rs 69.40, down 5.64 per cent on the BSE on Friday.
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