UCO Bank aims to grow loans, deposits by 20-22%

Says will be able to maintain NIM at around 3%

UCO Bank aims to grow its loans and deposits by 20-22 per cent in the current financial year, a senior executive of the bank told reporters here on Tuesday.

“In 2013-14 (April-March), the growth in our advances was higher than the industry average. Our credit growth was around 17 per cent, while our deposits were up 16 per cent. This year we expect 20-22 per cent growth in our deposits and advances,” Jai Kumar Garg, executive director at UCO Bank, said on the sidelines of an event to launch the bank's vigilance manual.

Credit growth for the banking system has continued to remain moderate at 14.3 per cent, on a year-on-year basis, as of March 19, 2014. Challenging macroeconomic environment and policy woes in select sectors appear to have affected investment sentiments for quite some time now.

The bank’s advances were at Rs 141,457 crore at the end of December 2013, up 16.5 per cent from a year earlier. Garg said during the fourth quarter the bank saw improvement in its loan recovery and there were instances where non-performing assets (NPAs) were upgraded. “The NPA issue has stabilised and we expect improvement in our asset quality,” he added.

The bank had halved its loan loss provisions from a year earlier to Rs 204 crore in October-December, following improvement in its credit quality. Gross NPA ratio had declined by 33 basis points to 5.20 per cent, while net NPA ratio fell by 26 basis points to 3.06 per cent at the end of the quarter.

Garg was confident the bank would be able to maintain its net interest margin at around three per cent but declined to offer details, as the state-run lender was yet to declare its earnings for the January-March quarter and for financial year 2013-14.