UCO Bank Q4 net profit at Rs 16.78 crore

Public sector lender UCO Bank on Friday reported net profit of Rs 16.78 crore for the fourth quarter ended March 31, mainly due to fall in NPA and lower provisioning.

Public sector lender UCO Bank on Friday reported net profit of Rs 16.78 crore for the fourth quarter ended March 31, mainly due to fall in NPA and lower provisioning. The Kolkata-headquartered lender had posted net loss of Rs 1,552.03 crore during January-March quarter of 2018-19.

Sequentially also, there was a net loss of Rs 960.17 crore in third quarter of 2019-20. Income during the March quarter increased to 4,511.21 crore, from Rs 4,148.52 crore in same period of preceding fiscal, UCO Bank said in a regulatory filing.

The bank's provisioning for bad loans and contingencies fell to Rs 1,199.82 crore during the quarter as against Rs 2,242.58 crore in the year-ago period. The lender recorded a net profit of Rs 17 crore in the last quarter of previous fiscal and is ready to come out of the PCA framework, UCO Bank MD and CEO A K Goel said. He said the bank has also met the other parameters required to come out of the PCA which are net NPA which has to be less than six per cent, capital adequacy and return on assets (RoA).

"The bank has been able to meet all criteria required to come out of PCA framework", Goel said at a news virtual news conference. RBI had imposed PCA (prompt corrective action) against the lender in May 2017 due deteriorating asset quality for which restrictions on lending was initiated.

Goel said that the bank has registered highest operating profit in the last 18 quarters in Q4 of previous fiscal. Savings deposits of the bank increased 7.2 per cent in the last quarter of 2019-20 to Rs 63,607 crore, he added.

For the full FY20, the bank trimmed on its net loss to Rs 2,436.83 crore, compared to Rs 4,321.08 crore loss in FY19. Income for the year increased to Rs 18,005.55 crore as against Rs 15,844.14 crore.

On asset front, the lender improved its gross non-performing assets (NPAs) to 16.77 per cent of the gross advances as on March 31, 2020 compared to 25 per cent in March 2019. In absolute value, bank's gross NPAs were stood at Rs 19,281.95 crore as against Rs 29,888.33 crore.

Net NPAs came down to 5.45 per cent (Rs 5,510.65 crore) from 9.72 per cent (Rs 9,645.92 crore). UCO Bank said that in terms of the Supreme Court order and necessary guidelines issued by Reserve Bank of India (RBI), it has kept Delhi Airport Metro Express Pvt Ltd "DAMEPL" as standard account. The bank said it has not treated a loan amount of Rs 194.14 crore as NPA against DAMEPL. However, provision of Rs 48.54 crore has been made, as required. On divergence in asset classification and provisioning in terms of Risk Assessment Report (RAR) of the RBI for the year ended March 31, 2019, the bank said there was a gap of Rs 1,217.42 crore in gross NPA reported by it, which was assessed by the RBI.

Bank has made full provision against the said divergence, it added. Thus, counting on the divergence, the bank said its net loss for FY19 widened to Rs 5,225.53 crore as against Rs 4,321.09 crore reported earlier.

The non-performing loan provisioning coverage ratio is 85.46 per cent as on March 31, 2020 as against 74.93 per cent a year earlier. The bank has reported two loan accounts under Borrowal Fraud category to the RBI in the first quarter of 2020-21, and amount outstanding was Rs 581.59 crore as on March 31, 2020, it said. "The accounts were already under NPA category and provision amounting to Rs 282.64 crore is held in the account as at March 31, 2020.

"Bank has made additional provision of Rs 74.73 crore (25 per cent of remaining provision) as on March 31, 2020 and the remaining amount of Rs 224.22 crore has been charged to Reserves and deferred for adjustment in subsequent quarters," UCO Bank said. UCO Bank stock jumped 15.39 per cent at close to Rs 16.12 apiece on the BSE.