UCO Bank posts Q2 net profit at Rs.1.5 bn

October 31st, 2008 - 9:05 pm ICT by IANS  

Kolkata, Oct 31 (IANS) The city-based UCO Bank registered a net profit of Rs.1.5 billion in the quarter ended Sep 30, compared to Rs.1.1 billion during the corresponding period last fiscal, a top company official said here Friday.”Increase in non-interest income and reduction in NPA (non-performing assets) have led to this profit in the bank,” S.K. Goel, chairman and managing director of the bank, told reporters at a media briefing.

The bank’s total deposits as of September-end was Rs.117.27 billion, while advances were Rs.116.76 billion.

At present, the net interest margin of the bank is 1.82 percent.

UCO Bank will get an infusion of Rs.8 billion from the government through preferential shares and fresh bonds in the coming 15 days, Goel said.

The funding would consist of Rs.3.25 billion of preference capital, Rs.3 billion of bond to be issued by the bank, and Rs.1.75 billion via innovative perpetual debt instrument.

“The fund infusion by the government would take our capital adequacy ratio to much above 12 percent from the present 10.25 percent at the end of September,” Goel said.

Though the bank has a headroom to raise another Rs.8 billion in the form of tier-II capital, he said, adding that the bank would venture into it if only it is necessary.

Goel expects to achieve a growth rate of 20 percent in its advances and a growth rate of 19 percent in its deposit in 2008-09 (April-March).

The net non-performing asset ratio has come down to 1.61 percent as of Sep 30, as against 2.26 percent on the same date last year.

“Arresting slippage of fresh non-performing assets and maximising efforts at recovery through the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act would be a focus area for the bank during the rest of the year,” Goel said.

The bank will also focus on increase of non-interest income through aggressive marketing of third party and technology-based products.

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