State-run lender UCO Bank on Saturday reported around 50 per cent year-on-year growth in its net profit to ₹602.74 crore for the second quarter this fiscal, backed by over 45 per cent y-o-y rise in its operating profit and around 44 per cent y-o-y fall in provisions during the period.
The Kolkata-based bank had registered ₹401.67 crore net profit for the second quarter last fiscal. The lender posted ₹550.96 crore net profit in the first quarter of the current financial year.
Its operating profit for the second quarter of FY25 grew ₹45.80 crore to ₹1431.60 crore from ₹ 981.88 crore for the corresponding period of FY24, the bank said in a stock exchange filing.
Net Interest Income (NII) for the quarter ended September 30, 2024 stood at ₹2300.34 crore, registering a growth of around 20 per cent on a y-o-y basis as against ₹1916.55 crore for the same period a year ago. Domestic Net Interest Margin (NIM) rose 25 basis points y-o-y to 3.30 per cent. During the period non-interest income grew 53.48 per cent y-o-y at ₹993.07 crore.
Talking to the media, UCO Bank Managing Director and Chief Executive Office Ashwani Kumar said the increase in net interest income and non-interest income were the two main factors for the growth in net profit. “Our provision coverage ratio slightly came down and NIM improved,” Kumar said. Provision Coverage Ratio stood at 95.92 per cent as on September 30, 2024.
Total provision during the quarter fell 44.07 per cent y-o-y at ₹492.84 crore compared with ₹342.09 crore for the same period last fiscal. Fresh slippages stood at ₹864 crore during Q2FY25 compared with ₹578 crore in Q2FY24. “Slippage was slightly elevated in this quarter due to one corporate account which turned into an NPA, having an exposure of around ₹245 crore,” the MD said.
Total Recovery and upgradation
Total recovery and upgradation during the period stood at ₹1017 crore as against ₹656 crore during the corresponding period last fiscal.
UCO Bank has so far recovered around 90 per cent of the “erroneous credits” which certain account holders of the bank had received via Immediate Payment Service (IMPS) last year. “Actions are on to recover the rest of the money. Our endeavour is to recover maximum during this fiscal,” Kumar said. Notably, certain accounts holders of the Kolkata-based bank in November last year had received a total of around Rs 820 crore “erroneous credits” via IMPS.
The lender’s asset quality improved during Q2FY25. Gross NPA ratio fell 96 bps year-on-year to 3.18 per cent, whereas net NPA ratio fell 38 bps y-o-y to 0.73 per cent during the period.
The bank is planning to tap capital markets for raising of equity capital upto ₹ 1500-2000 crore by way of QIP in one or more tranches. “We may go for it in the third quarter, subject to market conditions,” Kumar said.
The bank’s overall loan growth target for this fiscal is 12-14 per cent y-o-y. It expects that home and car loans to grow 18 per cent and 30 per cent y-o-y, respectively, during this festive season.
In the second quarter the lender witnessed an 18 per cent y-o-y growth in gross advances, while deposits growth stood at 10.57 per cent y-o-y.
