UCO Bank Reports Strong 24% Growth in Q4 Profit, Net Profit Rs.653 Cror
State-owned UCO Bank has announced a 24% year-on-year increase in its net profit for the fourth quarter, reaching ₹653 crore. This strong performance was driven by steady business growth and better recovery from accounts that had previously been written off. In comparison, the bank had posted a net profit of ₹526 crore in the same quarter last year.
Net Interest Margin (NIM) and Income Growth
During the January-March quarter, UCO Bank’s net interest margin (NIM) stood at 3%. This was slightly lower than 3.17% in the previous quarter, but close to the 3.03% recorded in the same period last year. For the entire financial year FY25, the bank’s NIM improved to 3.08% compared to 2.92% in the previous year.
Managing Director Ashwani Kumar has set a target for the NIM to stay between 3% and 3.10% for FY26, indicating a focus on maintaining profitability.
The bank’s net interest income (NII), which is the difference between interest earned and interest paid, rose by 23.4% year-on-year to ₹2,698 crore during the quarter. Additionally, other income such as fees and commissions also saw a growth of 23.7%, reaching ₹1,392 crore. Operating profit increased by 23.5% to ₹4,090 crore, reflecting strong overall financial health.
Strong Recovery from Written-Off Accounts
One of the highlights of the quarter was UCO Bank’s impressive recovery from bad loans. The bank recovered ₹964 crore from written-off accounts, compared to ₹322 crore in the same period last year. Cash recovery and account upgrades from on-balance sheet loans stood at ₹345 crore, slightly lower than ₹357 crore recovered in the year-ago quarter.
Asset Quality Improvement
UCO Bank also made significant progress in improving its asset quality:
- Gross Non-Performing Assets (GNPA) ratio fell by 77 basis points to 2.69% at the end of FY25.
- Net NPA dropped by 39 basis points to 0.50%.
This improvement indicates that the bank’s loan book is becoming healthier and more stable.
Growth in Advances and Deposits
UCO Bank’s business growth remained strong:
- Gross advances (loans given) grew by 17.7% year-on-year to ₹2.20 lakh crore.
- Deposits rose by 11.6% to ₹2.94 lakh crore.
Looking ahead, the bank has provided guidance for FY26, expecting:
- Advance growth of 12-14%.
- Deposit growth of 10-12%.
Dividend and Capital Raising Plans
As a reward to its shareholders, UCO Bank’s board has proposed a dividend of 3.90%, which amounts to ₹0.39 per equity share for FY25.
To meet regulatory requirements and reduce the government’s ownership to 75% (from the current 91%), the bank plans to raise equity capital by selling 270 crore shares with a face value of ₹10 each.
Managing Director Ashwani Kumar said that the bank is considering various routes for this fundraise, including:
- Qualified Institutional Placement (QIP)
- Follow-on Public Offer (FPO)
- Offer for Sale (OFS)
Based on the current share price, the capital raising could amount to over ₹8,300 crore.