Public sector UCO Bank has posted a 19 per cent growth in net profit at Rs 102.56 crore during the fourth quarter of the last financial year compared with Rs 85.99 crore in the corresponding period last year.

Better recovery and a rise in interest income led to the profit growth in the quarter, said S K Goel, chairman and managing director, UCO Bank, in Kolkata on Friday.

The bank made a total provisioning of Rs 217 crore in the quarter compared with Rs 255.12 crore in the corresponding quarter last year.

It made a provision of Rs 50 crore against advances by way of credit linked notes (CLNs) amounting to Rs 101.44 crore, said Goel. It also made a provisioning for Rs 50 crore towards staff arrears.

Its total interest income in the quarter jumped 26.83 per cent to Rs 2,165 crore against Rs 1,707 crore in the same quarter last year.

Other income in the quarter was Rs 356.30 crore against Rs 275.10 crore in the corresponding period last year. Net interest margin (NIM) in the period was 1.75 per cent, against 1.80 per cent last year.

Goel expects NIM to be around 2.20 per cent in the coming year as deposit rates have started declining.

Total income of the bank increased to Rs 2,520.62 crore during the quarter from Rs 2,053.29 crore last year.

Capital adequacy ratio of the bank stands at 11.93 per cent.

The bank's deposits grew by 25.42 per cent during the quarter to Rs 1,00,221 crore while advances grew by 25.24 per cent to Rs 66,669 crore. The bank is eyeing a 20 per cent growth in business during next year, making it a Rs 2 lakh crore-entity.

Operating profit of the bank in the quarter was Rs 327 crore against Rs 326 crore in the corresponding quarter last year.

Interest rate
The bank is likely to reduce interest rates this month.

"We are looking at further reduction in PLR by 50 basis points, and a similar cut in deposits rates too," said Goel.

The bank will go for a follow-on public offer this year, amounting to Rs 135 crore.

The bank is planning to set up a "virtual banking unit" in Dubai by entering into an equal joint venture with a correspondent bank in Dubai, which will seek the regulator's nod there.

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