The bank said net loss narrowed by 66% to Rs 588.19 crore for the fourth quarter from Rs 1,715.15 crore during the same period a year ago.
UCO Bank on Friday said the Reserve Bank of India (RBI) has initiated the prompt corrective action (PCA) on it in view of high non-performing assets and negative return on assets.
“RBI, vide their letter dated May 5, has initiated prompt corrective action for UCO Bank in view of high NPA and negative RoA. These measures aim at improving performance of the bank and to strengthen internal controls of the bank,” the bank said in a late evening filing with the BSE. Earlier this month, IDBI Bank said the central bank had initiated the PCA against it.
Kolkata-based Uco Bank’s asset quality worsened further in the March quarter, as its gross non-performing assets (NPAs) in the absolute term rose close to 8% y-o-y to Rs 22,540.95 crore from Rs 20,907.73 crore for the corresponding quarter of the previous fiscal, according to a BSE filing on Friday.
Its gross NPAs soared by 1.6% on a quarter-on-quarter basis from `22,181.26 crore in the December quarter.
The bank reported that its net loss narrowed by close to 65.71% year-on-year to Rs 588.19 crore for the fourth quarter from Rs 1,715.15 crore for the same period a year ago, on the back of lower provisions to cover bad loans. In the third quarter ended December 31, 2016, the lender had posted a net loss of Rs 437.09 crore.
The lender in its filing, however, said the imposition of PCA would not adversely impact performances of the bank. “The board of directors at its meeting held on this day (Friday) took note of the measures taken by the RBI,” it added.
Under prompt corrective actions, controls imposed on a bank could range from restrictions in branch expansions to curb on relatively-risky lending.
During the fourth quarter, UCO Bank’s total income saw a 17.69% y-o-y dip at Rs 3,905.74 crore against Rs 4,745.48 crore in the year-ago period. Provisions and contingencies decreased by 70% y-o-y to Rs 701.02 crore from Rs 2,344.88 crore in the corresponding period previous fiscal.
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Gross NPA as a percentage of total loans rose to 17.12% in the March quarter from 15.43% during the same period last year. In the December quarter, gross NPA ratio was at 17.18%. Significantly, UCO Bank has one of the highest NPA ratios across the banking industry.
On Friday, the bank’s scrip fell 0.24% to `41.55 on the BSE. The lender announced the results after market hours.