Uco Bank Q2FY24 results: Net profit declines 20.4% to Rs 402 crore

Dip in non-interest income, rise in operating expenses dent profit

Uco Bank’s net profit for the quarter ended September (Q2FY24) declined 20.4 per cent year-on-year (y-o-y) to Rs 402 crore on a decrease in non-interest income and a rise in operating expenses.

Sequentially, the Kolkata-based public-sector lender’s profit went up 79.7 per cent in Q2, from Rs 223 crore in the quarter ended June (Q1FY24).

Its stock closed 0.9 per cent lower at Rs 37.5 a share on the BSE. Its capital adequacy ratio (CAR) stood at 16.83 per cent, with Tier-1 at 14.19 per cent at the end of September.

Its net interest income expanded 8.3 per cent to Rs 1,917 crore in Q2, compared to Rs 1,770 crore in the same quarter a year ago. Sequentially, NII declined 4.6 per cent from Rs 2,009 crore reported in Q1FY24.

The bank’s domestic net interest margin (NIM) expanded to 3.05 per cent in Q2FY24, compared to 2.97 per cent in Q2FY23. Sequentially, NIM inched up from 3.03 per cent in Q1FY24, according to an analyst presentation.

Non-interest income -- comprising fees, commissions, treasury income, and recoveries -- declined by 17.07 per cent YoY to Rs 647 crore. Sequentially, it rose marginally from Rs 633 crore in Q1FY24.

The operating expenses, including staff expenses, grew 16.3 per cent y-o-y to Rs 1,582 crore in Q2FY24. Sequentially, they rose 9.9 per cent from Rs 1,439 crore in Q1FY24.  

The lender’s provisions for non-performing assets (NPAs) declined to Rs 335 crore in Q2, from Rs 400 crore in the year-ago period. Sequentially as well, provisions declined from Rs 389 crore in Q1FY24.

Advances grew 18 per cent y-o-y to Rs 1.67 trillion in Q2FY24. The retail, agriculture, and micro, small and medium enterprises MSME credit grew by 17.61 per cent to Rs 90,046 crore.

Total deposits increased 6.07 per cent y-o-y to Rs 2.49 trillion. The share of low-cost deposits — current account and saving account (Casa) — was 38.28 per cent at the end of September, down from 39.57 per cent a year ago.

The asset quality profile improved, with gross NPAs declining to 4.14 per cent in September from 6.58 per cent a year ago. Sequentially, it was down from 4.48 per cent in the June quarter.

Net NPAs declined from 1.99 per cent in September 2022 to 1.11 per cent in September 2023. Sequentially, net NPAs declined from 1.18 per cent in June 2023.

The provision coverage ratio improved to 95.07 per cent in September from 92.9 per cent a year ago.