Kolkata-headquartered UCO Bank on Monday reported a 147% year-on-year (y-o-y) rise in its net profit for the quarter ended June 2024 at Rs 551 crore, led by higher other income, and interest margin.
The lender’s non-interest income grew 32% y-o-y to Rs 835 crore during Q1FY25, whereas net interest income (NII) was up 12% y-o-y at Rs 2,254 crore. Global net interest margin (NIM), too, rose to 3.09% in the reporting quarter from 2.86% a year ago. The lender is aiming to maintain its NIM in the 2.9%-3% range going ahead, MD & CEO Ashwani Kumar said at a post results conference.
Overall advances of the bank were up 18% y-o-y to Rs 1.93 trillion as in June-end. Retail, agriculture and MSME (RAM) loans formed 61% of the lender’s loan book and grew 19% y-o-y, whereas corporate loans rose 20% y-o-y to Rs 64,611 crore. The bank aims to grow its loan book by 12%-14% in the current fiscal.
On liabilities side, UCO Bank’s deposits grew 7% y-o-y to Rs 2.68 trillion. The lender’s credit-deposit (CD) ratio, accordingly, moved up by 628 basis points (y-o-y) to 72% in Q1FY25. The state-owned bank is comfortable with its CD ratio touching 75% mark and has simultaneously introduced new deposit schemes to attract retail deposits. The bank is targeting to grow deposits by 8-10% in FY25.
UCO Bank’s asset quality also improved, with gross bad loan ratio falling by 116 basis points (bps) y-o-y to 3.32% and net non-performing asset ratio (NNPA) moderating by 40 bps to 0.78% in Q1FY25.
Lastly, the MD said the bank will likely raise Rs 2,000 crore in Q2FY25 or Q3FY25 via equity, which will dilute the government’s stake in the bank by 2%-3%. The Centre held 95% stake in UCO Bank as of June 2024.
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