UCO Bank 9-mth net profit up 47% to Rs 426 crore

UCO Bank has registered a 47 per cent growth in net profit at Rs 426 crore for the nine months ending December 2003, against Rs 289 crore in the previous corresponding period.

Profit for the third quarter rose 3.08 per cent to Rs 134 crore against Rs 130 crore. The decline in growth rate in the third quarter was mainly due to a decline in other income, specially treasury that almost halved to Rs 56 crore in the quarter against Rs 104 in the previous corresponding quarter.

The bank's operating profit, however, improved by 10 per cent to Rs 212 crore in the third quarter while the nine-month figure stood at Rs 51.62 per cent. Total non-interest income at the bank also declined by 0.16 per cent at Rs 636 crore for the nine-month period.

Meanwhile, UCO is all set to increase its Tier - II capital base by Rs 250 crore through bonds with a greenshoe option of additional Rs 150 crore "" adding to Rs 400 crore.

The bank is also looking at the possibility of an IPO in the next financial year. It has also firmed up plans of expanding its international network.

"We have enough room for raising Tier-II capital and intend to raise the fund in the current quarter," explained V P Shetty, chairman and managing director, UCO Bank.

The Tier-II capital of the bank till date stands at Rs 743 crore while its Tier-I capital is around Rs 1,438 crore.

Talking about net profit figures, the chairman said that the bank hopes to surpass its targeted net profit figure of Rs 450 crore for 2003-04, as it has already clocked a Rs 426 crore profit in the first nine months of the current fiscal.

Meanwhile, with UCO Bank's international operations having returned to the profit path, the bank has firmed up plans of opening representative offices in Malaysia and Indonesia. It is also in the process of opening a new branch in Singapore.

"We are in the process of tying up with agents in these two new locations and the offices would mainly be offering remittance services to non resident Indians," Shetty explained.

"The plan is to convert these two offices into full-fledged branches in the next couple of years," he added.

The banks trading profit has taken a hit this quarter and Shetty expects profits from treasury to remain at last years level.

In the third quarter, the bank has in fact witnessed a decline in treasury profit which has nearly halved to Rs 56 crore in the third quarter of 2003-04 against Rs 104 crore in the previous corresponding period.

Cumulative income from treasury operations for the nine-months period last year was Rs 285 against Rs 284 crore this year.

Talking about IPO financing, Shetty said, "Our experience with the UCO Bank IPO has prompted us to take the decision and we hope to do it at a steady pace beginning next fiscal."