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| UCO Bank posts 38% rise in net |
| BS Reporter / Kolkata Oct 16, 2009, 00:33 IST |
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Rs 800-cr follow-on public issue likely by Jan.
Backed by a robust growth in interest income and reduction in high-cost deposits, Kolkata-based UCO Bank has reported a 38.40 per cent rise in net profit to Rs 207.72 crore for the quarter ended September 2009 as against Rs 150.09 crore in the same period last year.
The bank shed about Rs 8,000 crore, or about 30 per cent of high-cost deposits, in the period. The interest income rose about 19.55 per cent to Rs 2,384 crore when compared with the same period of the previous financial year. The bank expects about 40 per cent growth in Casa (current account, savings account) deposits, which constitute about 30 per cent of its total deposits, by the end of the year. At present, they account for 24 per cent of the bank’s total deposits.
The net interest income rose 27.74 per cent to Rs 525 crore while the non-interest income rose 16.49 per cent to Rs 266 crore.
The bank’s net interest margin stood at 1.88 per cent in the quarter as against 2.20 in the same period last year and 1.74 per cent in the first quarter of 2009. It expects to maintain its NIM at 2.15 per cent by the end of this financial year.
The bank has shed about Rs 16,000 crore high-cost deposits in the last six months. It is planning to shed the remaining Rs 9,000 crore by the end of the third quarter.
The treasury income rose 116 per cent to Rs 65 crore in the second quarter over the same period last year.
The bank’s total income rose from Rs 2187.98 crore in the second quarter of 2008-2009 to Rs 2609.82 crore, a rise of 19.28 per cent.
“Along with a good rise in interest income, we have been able to curtail NPAs (non-performing assets) and control expenditure, which led to about 38 per cent rise in net profit. I don’t see any further fall in interest rates, which will help us maintain an NIM of 2.15 per cent,” said Chairman and Managing Director SK Goel.
The NPAs were at 1.01 per cent as against 1.61 per cent in the same period of the previous financial year. The gross NPAs for the quarter were 2.16 per cent as against 2.58 per cent in the same period of the previous financial year.
The capital adequacy ratio (CAR) of the bank (according to Basel II norms) stood at 11.75 per cent as against 11.61 per cent in the same period of the previous financial year. The bank expects a CAR of above 12 per cent by March 2010.
However, net profit from overseas operations stood at Rs 16 crore in the quarter as against Rs 33 crore in the same period of 2008-2009.
“We have taken a conscious decision to go slow on overseas operations. The reduction in overseas profits have been by balanced by a rise in domestic profits,” said Goel.
The bank expects its Rs 800 crore follow-on public offer (FPO) to hit the market by January 2010.
“We expect to get the approval of the government for the offer by the end of this month,” Goel told Newswire 18.
The bank planned to raise about Rs 800 crore in the FPO, factoring in a price of Rs 70 a share, he said.
The government had approved a capital infusion of Rs 750 crore in 2009-10. “The FPO is an economical option for us as the government funding comes at a cost of repo plus 1 per cent interest rate,” Goel said.
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