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Thursday, November 8, 2012

UCO Bank Q2 net slumps 55% on higher provisioning

Higher provisioning for non-performing assets (NPAs) pulled down the net profit of UCO Bank by 55 per cent to Rs 104 crore for the quarter ended September 30, 2012.

Provisioning increased by 26 per cent to Rs 597 crore. According to Arun Kaul, Chairman and Managing Director, UCO Bank set aside Rs 435 crore as provisioning towards NPA during the period under review, as compared with Rs 244 crore during the same period last year.

“We witnessed fresh slippages worth Rs 1,500 crore during the quarter, of which, Rs 820 crore came from one group alone,” Kaul said at a press meet to discuss the bank’s performance during the quarter.

Kaul, however, refused to divulge further details about the group which was largely responsible for pushing up the bank’s NPA.

The percentage of gross NPA to advances increased to 4.88 per cent (3.64 per cent), while net NPAs rose to 2.94 per cent (2.11 per cent).

The rise in bad assets affected the bank’s profitability dragging down the net interest margin to 2.24 per cent (2.84 per cent).

“Moving forward our focus will be on arresting slippages and initiating recovery measures. If we can contain our NPAs, then our margins should also improve,” he said.

Capital requirement

UCO Bank has sought Rs 1,500 crore worth capital infusion from the Union Government this fiscal to fund its growth needs.

The bank is aiming at 16-17 per cent growth in credit and deposits this fiscal.The shares of UCO Bank closed at Rs 74.40, up 1.02 per cent on the BSE on Wednesday.


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