Public sector lender Uco Bank has reported a 50.87% y-o-y jump in net profit to Rs 156.20 crore for the quarter ended September 30...
Public sector lender Uco Bank has reported a 50.87% y-o-y jump in net profit to Rs 156.20 crore for the quarter ended September 30, up from Rs 103.53 crore for the year-ago period, on the back of strong treasury gains and a reduction in total provisions.
Asset quality, however, deteriorated with NPAs in absolute term rising a whopping 64% y-o-y to Rs 12,226.66 crore as some large accounts slipped into bad loans.
Net interest income (NII) saw a 2.38% y-o-y rise to Rs 1,416 crore for the July-September period, while the bank recorded a profit of Rs 273 crore in treasury operations during the period, up 133% y-o-y. Other income during the period under review grew 14.5% y-o-y to Rs 411 crore. Net interest margin (NIM) at the end of second quarter stood at 2.45%.
Uco Bank managing director and chief executive officer RK Takkar said although provisioning for NPAs increased during the period, other provisions have reduced due to new RBI guidelines, leading to a dip in total provisions.
While the bank’s provisioning for NPAs rose 116.83% y-o-y to Rs 863 crore, total provisions dipped 2.35% to Rs 913.27 crore.
Takkar said some large accounts, which were facing difficulties, contributed to the fresh slippages and over 24% of that were from the restructured category. The maximum slippages were in infrastructure, real estate and pharmaceutical industries, he added. At the end of September quarter of FY16, fresh slippages of the bank stood at Rs 1,876 crore.
The lender’s NPA as a percentage of total loans increased sharply to 8.51% during the second quarter against 5.20% in corresponding period of FY15. Its net NPA ratio also rose to 5.15% from 3.15% in the year-ago period.