UCO Bank net profit rises 22% to Rs 123.61 crore in June quarter

State-owned UCO Bank on Friday posted a 22 per cent rise in its net profit at Rs 123.61 crore for the first quarter ended June 30, helped by fall in bad loans.

The bank had reported a net profit of Rs 101.81 crore in the same quarter of financial year 2021-22.

However, the total income declined to Rs 3,796.59 crore, as against Rs 4,539.08 crore in the first quarter of the previous fiscal, UCO Bank said in a regulatory filing.

"The bank has registered healthy growth in the first quarter. Going forward, we expect more traction in credit offtake in both retail and corporate (segments). We expect a credit growth of 12-13 per cent in the September quarter," UCO MD & CEO Soma Shankar Prasad said.

He also said there is no capital raising plan in this fiscal as we have a Capital Adequacy Ratio (CAR) of 14.13 per cent.

Interest income during the quarter under review increased to Rs 3,851.07 crore, from Rs 3,569.57 a year ago.

The Kolkata-headquartered lender trimmed its gross non-performing assets (NPAs or bad loans) to 7.42 per cent of the gross advances as of June 30, 2022, as against 9.37 per cent in the first quarter of FY 2021-22.

In value terms, the gross NPAs fell to Rs 9,739.65 crore from Rs 11,321.76 crore.

Net NPAs too declined to 2.4 per cent in the quarter under review, from 3.85 per cent a year ago.

Prasad said in the subsequent quarters of 2022-23, recoveries are likely to be around Rs 1,800 crore (Rs 600 crore in each quarter).

The bank's provisions for bad loans and contingencies came down to Rs 246.83 crore in the reported quarter, from Rs 1,127.11 crore in the year-ago period.

Of this, the provisions for NPAs also decreased to Rs 267.56 crore in the first quarter of this fiscal, from Rs 844.76 crore a year-ago.

The Provisioning Coverage Ratio of the bank stood at 91.96 per cent at the end of first quarter.

"Considering the likely impact of COVID-19, the bank is holding ad hoc provision of Rs 715 crore as on June 30, 2022 (reversed Rs 285 crore during the quarter ended June 30, 2022) to meet any exigencies arising out of the pandemic," the lender said.

"Though some of the accounts are under stress due to Covid, none of those has turned into NPA in this quarter," Prasad added.