UCO Bank Q2 net soars nearly 7-fold, asset quality improves

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October 29, 2021 6:30 AM

Operating profit during the period grew 24% y-o-y to Rs 1,334.16 crore. Net interest income (NII) grew 14.68% y-o-y to Rs 1,597.73 crore, while non-interest income saw a 31.37% y-o-y growth at Rs 936.07 crore.

During a virtual press conference after declaring the results, Uco Bank MD & CEO AK Goel, without mentioning the name of Srei, said, “It will be very premature to talk about the bad loan recovery from the two NBFCs. But, we will remain optimistic that a good recovery should come (through insolvency resolution process).”During a virtual press conference after declaring the results, Uco Bank MD & CEO AK Goel, without mentioning the name of Srei, said, “It will be very premature to talk about the bad loan recovery from the two NBFCs. But, we will remain optimistic that a good recovery should come (through insolvency resolution process).”

Buoyed by an increase in operating profit and a decrease in provisions, state-run Uco Bank on Thursday reported a nearly sevenfold year-on-year jump in its net profit to Rs 205.39 crore for the second quarter this fiscal from Rs 30.12 crore for the same period last fiscal.

The city-based lender, which recently came out of the Prompt Corrective Action (PCA) measure of Reserve Bank of India, showed a significant improvement in its asset quality during the second quarter despite the fact that it recognised its exposure of around Rs 1,000 crore in Srei Infrastructure Finance and Srei Equipment Finance as non-performing assets (NPAs).

The Kolkata bench of the National Company Law Tribunal (NCLT) earlier this month gave its approval to start insolvency proceedings against Srei Infrastructure Finance and its wholly-owned subsidiary Srei Equipment Finance after the RBI had filed insolvency applications against the two non-banking financial companies (NBFCs).

During a virtual press conference after declaring the results, Uco Bank MD & CEO AK Goel, without mentioning the name of Srei, said, “It will be very premature to talk about the bad loan recovery from the two NBFCs. But, we will remain optimistic that a good recovery should come (through insolvency resolution process).”

During the second quarter, the bank’s NPAs in absolute terms fell 3.64% quarter-on-quarter to Rs 10,909.79 crore from Rs 11,321.76 crore in the first quarter this fiscal. The Gross NPA ratio during the quarter under review declined 39 basis points sequentially at 8.98%.

Provision for NPAs declined 35.3% y-o-y to Rs 1,032.14 crore in Q2FY22 as against Rs 1,595.39 crore during Q2FY21.

Operating profit during the period grew 24% y-o-y to Rs 1,334.16 crore. Net interest income (NII) grew 14.68% y-o-y to Rs 1,597.73 crore, while non-interest income saw a 31.37% y-o-y growth at Rs 936.07 crore.

The lender’s domestic net interest margin (NIM) improved marginally to 2.9% from 2.88% during the corresponding quarter last fiscal. The bank expects its NIM to further improve to around 3% by the end of this fiscal.

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