Announcing the first-half results on Wednesday, chairman Sharda Singh said the bank's improved performance was largely the result of reduction in cost of deposits from 8.35 per cent to 8.26 per cent and higher yield on advances at 10.55 per cent against 10.51 per cent.

Singh said if the current trend in profitability is maintained, Uco Bank will end the year with an operating profit of around Rs 90 crore which will enable it to break even. This, of course, is on the assumption that the bank would not have to provide for arrear wage liability arising out of the pending wage settlement.

During the first half, the 6 per cent growth in deposits compared favourably with the 6.19 per cent growth recorded by all-India scheduled commercial banks. The growth in credit was 8.31 per cent as against 3.39 per cent industry growth during the period.

Singh pointed out that the bank's domestic operations had also turned around with an operating profit of Rs 11 crore after reporting losses in the previous year.

Gross non-performing assets in domestic operations of the bank had come down from Rs 1,292 crore on March 31, 1999 to Rs 1,254 crore on September 30, 1999. The capital adequacy ratio was marginally higher at 9.80 per cent as against 9.63 per cent as on March 31, 1999.

In fact, Uco Bank hopes to peg fresh accretions to NPAs at Rs 100 and bring down the level of gross NPAs down to Rs 1,500 crore this fiscal from Rs 1,548 crore in 1998-99.