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UCO Bank net loss at Rs 601 crore; seeks capital from LIC and govt

The total provisions of the bank (other than current tax) and contingencies stood at about Rs 1,803 crore in Q1FY20

Namrata Acharya  |  Kolkata 

UCO Bank
UCO Bank | Photo: Reuters

has posted a net loss of nearly Rs 601 crore in the second quarter (Q2) of this fiscal year, against a net loss of about Rs 634 crore in the same period last fiscal year.

However, the bank posted an operating profit of about Rs 1,201 crore in the last quarter, which was the highest in the last 14 quarters, said A K Goel, managing director and chief executive officer,

Ageing provisions for non-performing assets (NPAs) led to high net loss in the last quarter, said Goel. The net NPA of the bank — as a percentage of total lending — stood at 8.98 per cent of the bank in the last quarter, against 9.72 per cent in the first quarter (Q1) of this fiscal year and 12.74 per cent in the same period last year.

The gross NPA of the bank in the last quarter stood at 24.85 per cent, against 25 per cent in Q1 and 25.71 per cent in the same period last year.

The bank has set a recovery target of Rs 2,000 crore every quarter, said Goel. Last quarter, the bank made a recovery of Rs 824 crore, while the slippages were Rs 1,233 crore.

The total provisions of the bank (other than current tax) and contingencies stood at Rs 1,803 crore in Q1 of 2019-20 (FY20), against Rs 1,781 crore in the same period of the last fiscal year. The net interest income of the bank for Q2 of FY20 stood at Rs 1,335 crore.

has assessed a total capital requirement of Rs 4,500 crore. The bank has written to Life Insurance Corporation (LIC) of India for fund infusion and will also seek capital from the government, said Goel.

At present, LIC holds 4 per cent stake in the bank, and the holding can go up to 15 per cent.

The bank raised Rs 500 crore as tier II capital from LIC in the last quarter. The bank has also raised Rs 266 crore through employee stock purchase plan (ESPP).

“The bank will explore all options for raising capital, including seeking it from the government, LIC, ESPP, and qualified institutional placement,” said Goel.

The asset-liability committee of the bank recently decided to lower the marginal cost of funds-based lending rate by 5 basis points to 8.60 per cent in the one-year tenor bracket, said Goel.

First Published: Thu, August 08 2019. 18:41 IST