UCO Bank, a city-based lender, reported an 86.2% increase in net profit for the March 2023 quarter, which resulted in a 2% rise in its shares on Tuesday. The bank’s stock gained 2.06% to settle at Rs 30.72 on the BSE, with the traded volume of 71.09 lakh shares on BSE and over 5.10 crore shares on NSE during the day. The global business of the bank for fiscal 2022-23 reached more than Rs 4.10 lakh crore, with deposits at Rs 2.50 lakh crore and advances at Rs 1.61 lakh crore. MD&CEO of UCO Bank, Soma Sankara Prasad, said that the bank would raise money from the market in the form of Tier I capital and bring down the government holding in the bank from 95.39% to a reasonable level.
The bank’s asset quality stood at a lower GNPA of 4.78% at the end of the fourth quarter, while NNPA was at 1.29%, according to Prasad. He also mentioned that some of the restructured accounts were under stress, but there was no general stress in the SME loan book. He added that there was good demand for credit from corporates in sectors like cement, steel, chemicals, FMCG, renewables, and NBFCs, and the bank had entered into co-lending activity with several NBFCs.
UCO Bank’s capital adequacy ratio at the end of the fourth quarter of the last fiscal stood at 16.51%, and its net interest margin (NIM) was 2.87%. Prasad stated that efforts would be made to improve NIM and take it to 3%. The bank’s provision coverage ratio (PCR) increased to 94.5% as of March 31, 2023, from 91.44% in the same period of the previous year. In the January-March quarter of 2021-22, the bank reported a profit of Rs 312.18 crore.
UCO Bank’s annual net profit of Rs 1,862.34 crore in 2022-23 was the highest ever, according to the Kolkata headquartered lender’s stock exchange filing. The bank’s net interest income (NII) during the year was also its highest ever, at Rs 7,343.13 crore. The bank’s gross non-performing assets (NPA) in the fourth quarter declined to 4.78% from 7.89% a year ago.
In a virtual news conference, Prasad said that the bank’s capital position was healthy, and the bank would have no difficulty growing in the future. The bank’s strong performance has garnered investor interest and propelled its shares upwards. It remains to be seen whether UCO Bank can maintain this momentum in the coming quarters.
Uco Bank’s strong performance in the fourth quarter of the fiscal year 2022-23 has been attributed to the bank’s efforts to strengthen its balance sheet, reduce non-performing assets, and focus on core business activities. The bank has been working on improving its asset quality and reducing its dependence on non-core businesses.
Speaking about the bank’s performance, Soma Sankara Prasad, MD&CEO of UCO Bank, said, “The bank has been able to improve its asset quality, reduce its non-performing assets, and focus on its core business activities. We have also been successful in reducing our dependence on non-core businesses, which has helped us to improve our profitability.”
Prasad also highlighted the bank’s efforts to raise capital through the Tier I capital route. “The government holding in the bank stands at 95.39 per cent. It will be brought down to a reasonable level for which it will tap the capital market,” he said.
According to Prasad, the bank has seen good demand for credit from corporates in sectors like cement, steel, chemicals, FMCG, renewables, and NBFCs. He also mentioned that the bank has entered into co-lending activities with a number of NBFCs.
The bank’s strong performance in the fourth quarter has also been attributed to its focus on digital transformation. The bank has been investing in technology and digitization to improve customer experience and reduce operational costs.
