 "UCO Bank net profit up by 50%")
Public sector lender UCO Bank today reported nearly 50 per cent rise in net profit, from Rs 104 crore in the quarter ended September 2014 to Rs 156 crore in the quarter ended September 2015, mainly on account of low provisioning and better treasury gains.
During the last quarter the bank reported a treasury profit of Rs 273 crore, which was 133 per cent more compared to the same period last year (Rs 117 crore). The provisions of the bank in the last quarter stood at Rs 913 crore, against Rs 935 crore in the same period last year.
The net interest income in Q2 of 2015-16 stood at Rs 1,416 crore, as against Rs 1,383 crore in the same period last year.
However, the bank's non-performing assets' percentage increased in the last quarter on y-o-y basis. The bank saw some of the large corporate accounts contributing to fresh slippages, 24.03 per cent of which were from restructured category. As on 30th September 2015, the bank's gross non performing assets was 8.51 per cent against 5.20 per cent in the same period last year. The net NPA of the bank in the last quarter stood at 5.15 per cent, against 3.15 per cent in the same period last year. The bank saw fresh slippages in sectors like infrastructure, real estate, pharmaceutical and engineering sectors. In the last quarter, bank sold assets worth Rs 116 crore to asset reconstruction companies.
Notably, UCO Bank has an exposure of about Rs 10,787 crore from discoms, of which around Rs 8,000 crore is in the form of loans. Under the government bail out package for the discoms, the loans will be converted into bonds. According to R K Takkar, managing director and chief executive of the bank, while yield on the loans will go down, the risk associated with loans will also get substantially mitigated.
According to Takkar, the bank would remain cautious in lending to large corporate entities, while increasing its focus on retail, agriculture and SME sectors.
At the end of last quarter, the bank's net interest margin was 2.45 per cent, against 2.31 per cent at the end of September 2014.
