UCO Bank Q2 Results: Net profit rises 50% to Rs 603 crore

State-owned UCO Bank on Saturday posted a 50 per cent jump in net profit to Rs 603 crore in the September quarter, helped by improvement in interest income.

The lender had recorded a net profit of Rs 402 crore in the same quarter a year ago.

Total income increased to Rs 7,071 crore during the quarter under review from Rs 5,866 crore in the same period last year, UCO Bank said in a regulatory filing.

The bank earned an interest income of Rs 6,078 crore during the quarter compared to Rs 5,219 crore in the same period a year ago.

Net interest income improved to Rs 2,301 crore, from Rs 1,917 crore in the year-ago period, registering a 20 per cent growth.

At the same time, Net interest margin rose to 3.10 per cent from 2.84 per cent at the end of the second quarter of the previous financial year.

Commenting on quarterly numbers, UCO Bank Managing Director and CEO Ashwani Kumar said the bank expects to continue the momentum.

Return on asset has improved to 0.73 per cent at the end of September 2024, he said, adding that it is expected to improve further in the coming quarters.

The guidance for NIM is 2.9-3 per cent for the current fiscal year taking into account anticipated rate cut by the RBI by March 2025.

The bank expects the credit growth of 12-14 per cent during the current financial year.

The bank was able to reduce gross non-performing assets to 3.18 per cent of the gross loans by the end of September 2024 from 4.14 per cent a year ago.

Similarly, net NPAs, or bad loans, eased to 0.73 per cent from 1.11 per cent at the end of the second quarter of the previous fiscal.

With regard to exposure in debt-ridden MTNL, Kumar said the bank has given Rs 245 crore to the state-owned company.

The bank has already made a provision of Rs 120 crore, almost half of its exposure to MTNL.

A resolution plan is being worked out in consultation with MTNL, he said, adding, many things are on the table but nothing has been finalised yet.

Capital adequacy ratio stood at 16.84 per cent with Tier-I capital ratio of 14.59 per cent at the end of September.