UCO Bank on Monday reported a 10% year-on-year rise in its net profit for the first quarter of FY26 at Rs 607.44 crore, supported by a growth in treasury and fee-based income.
Interest income rose 7% to Rs 6,436 crore while other income — driven by treasury gains and fees — climbed 19% to Rs 997.2 crore. Interest expenses increased 7% to Rs 4,032 crore, resulting in a 6.61% year-on-year growth in net interest income, which stood at Rs 2,403 crore.
The domestic net interest margin (NIM) declined sequentially to 3.18% from 3.22%. In the year-ago period, the domestic NIM was at 3.29%.
“We had earlier given the NIM guidance of 3–3.10% but looking at the front ending of the repo card, the NIM to be in the range of 2.9–3.0%,” said Ashwani Kumar, managing director & CEO, at the earnings press conference.
Retail, MSME lending fuels advance growth
Gross advances grew 16.48% year-on-year to Rs 2.25 lakh crore, outpacing the deposit growth of 11.37%. Deposits were at Rs 2.98 lakh crore as of June 2025.
Domestic advances jumped 20% to Rs 1.99 lakh crore, led by strong traction in the retail and MSME segments. The retail loan book surged 30.73% year-on-year to Rs 56,195 crore while MSME loans rose 20.33% to Rs 39,771 crore. Agriculture loans stood at Rs 29,961 crore, compared with Rs 25,950 crore a year ago. Together, the retail, agriculture and MSME (RAM) segments accounted for 63% of the domestic loan book.
Kumar attributed the strong retail loan growth to an 18% rise in home loans, 67% growth in vehicle loans, 47% increase in personal loans, and a 126% jump in pooled assets. “Going forward, this 30% growth will not be sustainable. It may slightly come down in the coming quarters,” he said. Corporate loans rose 15% year-on-year to Rs 74,051 crore.
Asset quality improves
The asset quality improved, with the gross non-performing asset (GNPA) ratio easing to 2.63% from 2.69% in March 2025. The net NPA ratio declined to 0.45% from 0.50% in the previous quarter.
Fresh slippages during the quarter stood at Rs 631 crore, accounting for 0.29% of standard advances. “The slippage ratio of 1.18% is well within the guidance of 1–1.25% given for the full year,” Kumar said.
Shares of UCO Bank closed 1% lower at Rs 31.79 on the NSE.
