UCO Bank on Thursday reported a multifold jump in net profit at Rs 205.39 crore for the second quarter ended September 2021 as bad loans fell.
The Kolkata-headquartered public sector lender had registered a net profit of Rs 30.12 crore in the year-ago period.
Total income in July-September 2021-22 rose to Rs 4,655.86 crore from Rs 4,327.13 crore in the year-ago period, the lender said in a regulatory filing.
Reserve Bank of India (RBI) had recently removed UCO Bank from its prompt corrective action (PCA) framework following improvement in various parameters.
The bank came under the purview of PCA restrictions in May 2017.
"This is the best result in the last three years. This shows that the bank is on the growth path", UCO Bank MD and CEO A K Goel said.
Operating profit of the lender during the second quarter of the current fiscal increased by 24 per cent to Rs 1,334 crore as compared to Rs 1,075 crore in the same period last year.
The capital adequacy ratio at 14.31 per cent at the end of September 2021 improved from 11.8 per cent quarter-on-quarter, Goel said during a virtual press conference.
He said the total business of the lender was at Rs 3.35 lakh crore at the September end of this year, registering a growth of 7.20 per cent.
During the period under review, gross non-performing assets (GNPAs) and net NPAs of the bank showed a declining trend quarter-on-quarter, Goel said.
In an apparent reference to the debt-ridden Srei Infrastructure Finance and Srei Equipment Finance Ltd, Goel said the bank has recognised two NBFC accounts belonging to a group with an exposure of Rs 1,000 crore as NPAs.
He did not mention the name of Srei during the press conference.
The NCLT had on October 8 admitted the insolvency pleas moved by banking sector regulator RBI against the two Srei Group firms and appointed an administrator to run the companies.
UCO Bank improved on its bad assets significantly as gross NPAs fell to 8.98 per cent at the end of September 2021 quarter from 11.62 per cent by the same period of 2020.
Value-wise, gross NPAs decreased to Rs 10,909.79 crore as against Rs 13,365.74 crore.
Net NPAs (bad loans) stood at 3.37 per cent (Rs 3,854.33 crore) from 3.63 per cent (Rs 3,831.88 crore).
As the NPA proportions fell, the bank's provisions for bad loans and contingencies for the quarter also came down to Rs 1,018.62 crore from Rs 1,301.10 crore marked for the year-ago period.
The provision coverage ratio, however, increased to 90.02 per cent at the end of the second quarter, Goel said, adding that "enough provisioning has been done due to possible impact of COVID crisis".
He said the lender has "decreased its dependence on corporate advances and is focusing on retail, agriculture and MSMEs".
UCO Bank stock closed at Rs 14.38 apiece, down by 2.04 per cent on BSE.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.