All is not lost! UCO Bank recovers Rs 800-Rs 900 crore from four stressed accounts

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January 5, 2020 1:43 AM

At the end of the second quarter, the Kolkata-based bank's gross NPAs, in absolute terms, stood at Rs 25,665.14 crore, registering over 12% quarter-on-quarter fall.

UCO Bank, NPA accounts, Essar Steel, Ruchi Soya Industries, CIRP, IBC, Prayagraj Power Generation, MSMEThe bank’s gross NPA, as a percentage of total loans, fell 298 basis points (bps) to 21.87% in the September quarter from 24.85% in the June quarter of this financial year.

Public sector lender UCO Bank on Saturday said it has recovered around Rs 800-Rs 900 crore of bad loans under successful resolutions of four big non-performing asset (NPA) accounts, including Essar Steel and Ruchi Soya Industries, in the December quarter of the present financial year.

At the end of the second quarter, the Kolkata-based bank’s gross NPAs, in absolute terms, stood at Rs 25,665.14 crore, registering over 12% quarter-on-quarter fall. Successful resolutions of Essar Steel and Ruchi Soya, under Corporate Insolvency Resolution Process (CIRP), and resolutions of Prayagraj Power Generation and RattanIndia Power outside the insolvency and bankruptcy code (IBC) during the October-December period will help the lender reduce its bad loans further.

“We recovered around Rs 800-Rs 900 crore of bad loans from successful resolutions of four cases — Essar Steel, Ruchi Soya, Prayagraj Power Generation and RattanIndia Power — during the December quarter,” UCO Bank MD and CEO A K Goel told reporters here.

The bank’s gross NPA, as a percentage of total loans, fell 298 basis points (bps) to 21.87% in the September quarter from 24.85% in the June quarter of this financial year. During the September quarter, net NPA ratio also slipped 66 bps sequentially at 7.32%. “We expect our net NPA ratio to be down at 6% by March 31, 2020. Then we hope to be able to come out of the prompt corrective action (PCA) framework of the Reserve Bank of India,” Goel said.
He said the bank was expecting a credit growth between 8% and 10% year-on-year for this fiscal, with focus remaining on MSME, housing and gold loans.

“Sluggishness in the corporate loan demand is still there, but there has not been much impact on retail loan demand due to the overall economic slowdown,” the MD averred. The lender was aiming to bring down percentage of corporate loan to 50% from the present 55% of its all lending in order to re-balance its loan book, he added.

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