State-owned UCO Bank announced that it had registered a 50% increase in net profit, reaching ₹603 crore for the September quarter, boosted by improved interest income. This compares to a net profit of Rs. 402 crore in the same quarter last year. Total income rose to Rs. 7,071 crore from Rs. 5,866 crore during the same period.
The bank reported interest income of Rs. 6,078 crore for the quarter, up from Rs. 5,219 crore a year ago. Net interest income also saw a significant increase, climbing to Rs. 2,301 crore from Rs. 1,917 crore, marking a 20% rise. Additionally, the net interest margin improved to 3.10%, up from 2.84% at the end of the previous financial year’s second quarter.
UCO Bank’s Managing Director and CEO Ashwani Kumar expressed optimism about maintaining this momentum. The return on assets improved to 0.73% as of September 2024, with expectations for further enhancement in the upcoming quarters.
The bank anticipates a net interest margin of 2.9-3% for the current fiscal year, considering a potential rate cut by the RBI by March 2025. Credit growth is expected to be between 12-14% during the financial year.
UCO Bank successfully reduced its gross non-performing assets (NPAs) to 3.18% of gross loans by the end of September 2024, down from 4.14% a year earlier. Similarly, net NPAs decreased to 0.73% from 1.11% at the end of the previous fiscal year’s second quarter.
Regarding its exposure to the debt-ridden MTNL, Kumar stated that the bank has lent Rs. 245 crore to the state-owned company, with provisions of Rs. 120 crore already set aside, nearly half of its total exposure. A resolution plan is in progress in collaboration with MTNL, with discussions ongoing but no final decisions made yet. The bank’s capital adequacy ratio stood at 16.84%, with a Tier-I capital ratio of 14.59% as of September.
