State-run UCO Bank on Tuesday reported around 27 per cent year-on-year jump in its net profit to ₹638.83 crore for the third quarter this fiscal, backed by over 41 per cent y-o-y increase in its operating profit during the period.

The Kolkata-based lender is planning to raise around ₹2,000 crore through Qualified Institutional Placement (QIP) in one tranche during the fourth quarter of the current financial year to reduce the government stake by around 3 per cent. The government currently holds 95.39 per cent in the bank.

The bank’s operating profit grew 41.69 per cent y-o-y at ₹1,585.69 crore for the third quarter of FY25 compared to ₹1119.14 crore for the corresponding period of FY24.

“Growth in profitability during the quarter was mainly due to around 20 per cent increase in net interest income and around 38 per cent increase in non-interest income on a y-o-y basis. These were the two components which resulted into the improvement in profitability over the last financial year. Third thing that added to the profitability was our cost to income ratio also improved during the quarter,” Uco Bank Managing Director and Chief Executive Office Ashwani Kumar said.

Net interest income (NII) for the quarter rose to ₹2,377.68 crore from ₹1,988.07 crore in the year-ago period. Net interest margin (NIM) for the quarter ended December 31, 2024 stood at 3.17 per cent as against 2.84 per cent for the same period in the preceding year.

During the period under review non-interest income stood at ₹1185.93 crore as against ₹860.82 crore in the same period of FY24.

Total provision during Q3FY25 rose 72.24 per cent y-o-y at ₹589.51 crore compared with ₹342.25 crore for the same period last fiscal. Fresh slippages stood at ₹416 crore against ₹483 crore in Q3FY24. “Slippages came down on the year-on-year basis. This quarter our slippages were in control,” Kumar said.

Cash recovery and upgradation during the period stood at ₹1,064 crore as against ₹1,097 crore during the corresponding period last fiscal.

The lender’s asset quality improved during Q3FY25. Gross NPA ratio fell 94 basis points year-on-year to 2.91 per cent, whereas net NPA ratio fell 35 bps y-o-y to 0.63 per cent during the period.

“We have taken approvals from the board and the government to raise around ₹2,000 crore through QIP. Our intention is to raise the amount in one tranche only. We have started meeting probable investors, mutual funds and analysts. Based on our discussions, we hope that we will get a good response. Hopefully, the QIP will be launched within this quarter,” Kumar added.

Published on January 21, 2025