Quarterly Results: UCO Bank’s net profit at Rs 30 crore

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October 23, 2020 3:00 AM

The lender had incurred a net loss of Rs 891.98 crore for the same period last fiscal as provisions for non-performing assets declined by 49% year-on-year and operating profit increased by 10% y-o-y.

The bank has recently requested RBI to lift restrictions as it has fulfilled all the criteria to come out of the PCA framework.

UCO Bank on Thursday reported Rs 30.12-crore net profit for the second quarter this fiscal. The lender had incurred a net loss of Rs 891.98 crore for the same period last fiscal as provisions for non-performing assets declined by 49% year-on-year and operating profit increased by 10% y-o-y.  The public sector lender had posted a net profit of Rs 21.46 crore for the first quarter of the current financial year. “The bank has reported net profits in three consecutive quarters. In the current scenario, it is very difficult to maintain the growth in operating profit. But for UCO Bank, it has grown by 10%. This is the highest operating profit in the last 21 quarters,” said MD & CEO AK Goel.

In the July-September quarter this fiscal, the bank’s operating profit stood at Rs 1,330.31 crore as against Rs 1,207.04 crore in the corresponding period of FY20. Net interest income also rose 10% y-o-y to Rs 1,393.16 crore, against Rs 1,266.20 crore in the year-ago period. As on September 30, domestic Net Interest Margin (NIM) stood at 2.62%. “For the remaining quarters of this fiscal, we will try to improve the Domestic NIM to around 3%,” Goel said. He said the bank has requested the Reserve Bank of India to lift restrictions under the prompt corrective action (PCA) as it fulfilled all the criteria to come out of the PCA framework. “They are reviewing our performance.”

The bank’s asset quality improved significantly as its gross non-performing assets (NPAs) in absolute terms fell 19.34% quarter-on-quarter to Rs 13,365.74 crore from Rs 16,576.43 crore in the first quarter of this fiscal. On a year-on-year basis, gross NPAs decreased by a whopping 48% from Rs 25,665.14 crore in the September quarter last fiscal.

According to Goel, around Rs 5,000 crore worth of loans could undergo restructuring under the RBI’s loan restructuring scheme. He said as on date no big corporate account (over Rs 100 crore) has approached the bank for loan recasts. The lender is looking to raise around Rs 500-1,000 crore worth capital through QIP. It has also approached the government for capital infusion.

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