UCO Bank Q2 profit surges 51% to Rs 156 crore

KOLKATA: State-run Uco Bank reported a 50% jump in net profit at Rs 156 crore for the September quarter, riding on higher treasury profits while it faltered on parameters such as asset quality and advance growth.

"Through judicious utilisation of market opportunities, bank continues to exhibit strong treasury gains," Uco Bank's new managing director and chief executive RK Takkar told media Saturday.

Uco's treasury operation recorded a profit of Rs 273 crore from sale of investment and exchange transactions, 2.33 times more than the year ago number at Rs 117 crore.

Its operating profit grew 7% at Rs 1129 crore over Rs 1056 crore in the corresponding period last year.

Asset quality, which has perennially been the bank's nemesis, deteriorated further with gross non performing assets ratio rising to 8.51% from 7.30% at the end of June. The ratio was 5.20% a year back.

Net NPA ratio was at 5.15%, rose from 4.53% sequentially and from 3.15% a year back.

"Some large borrower accounts facing difficulties contributed to fresh slippages, 24.30% of which was from the restructured loan category. The maximum slippages were in infrastructure, real estate, pharmaceutical and engineering industries," Takkar said.

Uco had to set aside Rs 863 crore as provisions to cover sticky loans, more than double of what it had provided for a year ago quarter at Rs 398 crore. Its total provision however came down to Rs 913 crore for the quarter under review from Rs 935 crore, supporting the net profit growth.

Its total advances growth remained flat at Rs 1.44 lakh crore while retail lending grew 12.37%.

Uco's new chief executive said the bank is well capitalised with adequacy ratio under Basel III standard being at 11.59% at the end of September.