State-owned lender, UCO Bank on Friday reported 20% year-on-year fall in net profit at Rs 402 crore, due to lower recoveries from written off accounts and treasury income in comparission with similar period last fiscal. On a sequential basis, however, the bottomline was up 80%.
During Q2FY24, the bank’s recoveries from written off accounts stood at Rs 290 crore, lower 29% year-on-year but 11% higher on a quarter-on-quarter basis. Its asset quality, meanwhile, continued improving with gross non-performing asset (GNPA) ratio falling from 6.58% in Q2FY23 and 4.48% in Q1FY24 to 4.14% as of September-end. Net NPA ,too, contracted seven basis points (bps) to stand at 1.11% as of September 30.
The bank aims to lower the GNPAs below 4% and NNPA to below 1% by FY24-end, MD & CEO Ashwani Kumar told FE. Further, UCO Bank’s treasury income also fell to `57 crore in Q2FY24, from Rs 138 crore in Q1FY24.
Overall advances of the state-owned bank grew 18% to Rs 1.67 trillion as of September 30, of which domestic retail, agriculture and micro, small and medium enterprises (MSME) loans (RAM) accounted for 63.15%. The bank will continue growing loans between 12-13% during the current fiscal, with focus towards RAM segment, Kumar said.
Corporate loans, which accounted for `52,907 crore, grew 15% year-on-year but de-grew 2% on a quarter-on-quarter basis. Kumar said that the bank had sanctioned `11,000 crore of corporate loans in Q2 and disbursed `8,000 crore out of the total during reporting period. The sequential contraction, however, was due to Rs 7,000-8,000 crore of such loans being repaid during Q2, he said, adding that the bank will continue growing its loan book with a focus on correct pricing.
On liabilities side, overall deposits grew 6.1% to `2.49 trillion, of which low-cost current account and savings account constituted 38%. UCO Bank’s domestic net interest margin grew 2 bps quarter-on-quarter to 3.05% during Q2. Its net interest income (NII) grew 8.3% year-on-year to `1,917 crore during the reporting period.