I place before you the highlights of your Bank's performance during the financial year2019-20. Bank has improved its performance during the year by posting profit during thelast quarter of the financial year 2019-20 after consequential losses for 17 quarters.Details of the achievements and initiatives taken by your Bank are provided in theenclosed Annual Report for the year 2019-20.
Global economic activity during the year 2019-20 remained slow paced in both advancedeconomies and emerging market economies caused by sluggish consumer demand prolongedtrade tensions and wide ranging policy uncertainties. Raising tariffs rapid shifts intrade policies resulted in dampening investment growth and deterioration of businessconfidence. Softening of demand weighed on global commodity prices in particular crudeoil and industrial metals. Amidst of all these the world economy witnessed a muted growthof 2.9% in 2019 compared to 3.6% in the previous year.
Domestic economy also witnessed a moderate growth of 4.2% in FY 2020. The growth inlast quarter of FY 2020 was largely impacted with outbreak of COVID -19. Some green shootsare however visible in agriculture. Low oil prices resulted in current account surplusdespite slump in exports. Though the outlook of the economy remain very uncertaineconomic activity is limping towards normalcy with people taking up activities byfollowing safety norms. Industries could not still operate to its full capacity as theworld is still battling with COVID-19.
Reserve Bank of India has taken series of measures to protect financial stability andarrest an economic meltdown resulted out of COVID 19 outbreak like reduction of reverserepo rate provided special liquidity support to non-banking finance and microfinancecompanies extension of moratorium on payment of interest and loan instalments andfacilitated increased emergency funding for state governments. As a relief measureCentral Government unveiled Rs.20 lakh crore Atmanirbhar Bharat package to boost varioussectors of economy. Hopefully these measures will surely minimise the impact of COVID 19on economy and leave the country on growth path.
Bank has improved its performance by minimising losses as compared to the previousfinancial year. Bank has reduced its losses to Rs. 2437 crore during FY 2020 as comparedto Rs.4321 crore in FY 2019. During the last quarter of the FY 2020 Bank has earned NetProfit of Rs. 16.78 Crore.
Operating Profit for FY 2020 is Rs.4836 crore as against Rs.2760 crore during FY2019 thereby reflecting an increase of 75.22% .Total income registered a growth of 13.64% from Rs.15 844 crore in FY 2019 to Rs.18006 crore in FY 2020. Cost of deposits hasdecreased from 5.07 % in FY 2019 to 4.90 % in FY 2020.Net interest income increased toRs.5092 crore in FY 2020 from Rs.4311 crore in FY 2019.During the year Bank madeprovision of Rs. 7272 crore against Rs.7081 crore in FY 2019.
Global business of the Bank stood at Rs.308165 crore as of 31.03.2020 compared toRs.317480 crore showing a decrease of 2.93% over March 2019. Global Deposits hasdecreased by 2.38% as of 31.03.2020 and stood at Rs.193203 crore compared to Rs.197907crore as of 31.03.2019. Global advances fell by 3.86% and stood at Rs.114961 crorecompared to Rs.119573 crore as of 31.03.2019.
The focus area for the year was increasing retail segment. Total Retail loan Portfolioof the Bank registered Y-o-Y growth of 12%. Home and Car (excluding pool) loans registeredY-o-Y growth of 14% and 16% respectively.
Domestic Investment of the Bank during the year 2019-20 increased by 11.05% fromRs.80622 crore as on 31.03.2019 to Rs.89532 crore as on 31.03.2020 largely due toallotment of recapitalization bond and purchase of Government securities.
During the Year 2019-20 the bank has registered a growth of 7.30% in interest incomefrom domestic credit/ investments which stands at Rs. 13715.01 crore as on 31.03.2020 ascompared to Rs. 12781.97 crore as on 31.03.2019 thereby registering a growth of Rs. 933.04crore on y-o-y basis mainly due to increase in domestic credit/ investment portfolio .Asset quality of the Bank has been improved during the financial year 2019-20 backed byall round effort in management of non-performing assets. Gross NPA reduced to Rs. 19282crore as on 31.03.2020 from Rs. 29888 crore as on 31.03.2019. The Gross NPA of the Bankdropped to 16.77% as on 31.03.2020 from 25% as on 31.03.2019. Our Net NPA has reduced to5.45% as on 31.03.2020 from 9.72% as on 31.03.2019. Provision Coverage Ratio has increasedto 85.46% as on 31.03.2020 from 74.93% as on 31.03.2019.
Capital Adequacy Ratio (CAR) under Basel lII stood at 11.70% and CET 1 at 8.98% as on31.03.2020. Govt. of India infused Capital to the tune of Rs. 4272 crore during the FY2020 and GOI holding stood at 94.44% as on 31.03.2020.
INITIATIVES TAKEN UP IN FY 2019-20
Initiatives for MSME growth
With a view to improve MSME Business and to reap the benefits of low cost of operationsand expertise of NBFC Bank has tied-up with M/s Srei Equipment Finance Limited (SREI) on17.02.2020 to offer Co-origination of loans for purchase of construction and mining farmand medical equipment under a co-lending arrangement. iQuippo a Kanoria Foundationinitiative will facilitate sourcing of loans under this programme.
Bank launched several schemes during the financial year for the benefit of MSMEs
Scheme for financing Two Wheelers under MUDRA for the purpose of commercial usefor the benefit of customers under MSME
A special scheme for MSEs "UCO Vyapar Samridhi"was launched on17/06/2019 where collateral free loans up to Rs.1 crore are sanctioned to MSEs includingRetail Traders
With a view to mitigate the liquidity crunch of MSMEs a new scheme for MSME"Standby Line of Credit for MSME" has been introduced on 06.01.2020.
The Bank has tied-up with RXIL and is trading at RXIL platform with effect fromFebruary 2019. Considering future business prospect under TReDS Bank has also tied-upwith M1xchange and Invoicemart on 14.11.2019 for discounting of bills at TReDS.
ATMs/Debit Cards :
Bank has introduced UCASH (Cardless Cash Withdrawal) facility at all UCO Bank ATMswhich can be used by our customers availing M-Banking facility. Bank has also introducedCash@POS facility by which our Debit and prepaid card holders can avail cash withdrawalfacility at POS/BC outlets. Bank is in the process of Installation of 400 new PassbookPrinting Kiosks and 100 new Cash recycler Machines for ease of customers
Bank has launched new revamped Mobile Banking App mBanking plus with better userinterface for customers including facilities like online PPF account Opening throughmobile banking 24x7 UPI services generation of Virtual card for customers who have notavailed physical debit cards utility bill payments and recharges through BBPS onlineRegeneration of FD receipt facility for debit card issuance request/card activationRequest for call back service enhanced security for debit cards through UCO secure withfacility of enable/disable card setting card limit and restricting international usagefacility.
Bank has implemented new features like Account Statement on email allowing customers toget pdf format account statement New debit card request & Cheque book request onlineFD renewal and Nominee addition facility Online application for availing Locker facilityseeding of PAN in account & submission of Form 15G/15H.
Bank provided facility for TDS certificate download through Digilocker. Bank hasimplemented Door Step Banking facilities for Senior Citizens and differently abled personsincluding those who are visually impaired. Bank also introduced Standing Instruction forpayment in PPF account facility.
Call Centre (UCO SAMPARK)
Bank has introduced IVR based Phone Banking solution called "UCO SAMPARK"through toll free number 18002740123 to help customers to carry out various bankingactivities like Balance enquiry Account Statement Mini statements for last 5transactions PAN & Aadhaar link status Blocking of Card UPI services InternetBanking facility etc. when dialed from their registered mobile numbers This facility isavailable in Hindi English and ten (10) other regional languages.
During the year 2019-20 Bank has taken several measures to increase retail & MSMEsegment and strengthen recovery segment. Several measures were also taken to improvecustomer convenience through technology and innovation. Bank has witnessed few greenshoots by posting profit in the last quarter of the financial year 2019-20.
The way forward for FY 2020-21 is shift from survival to growth mode. Bank willcontinue its focus on containing slippages and reaching the Industry bench marks onadvances and CASA growth.
Bank is in the process of introduction of Loan Originating System (LOS) to upgrade itsappraisal techniques through technology driven end to end automation of loan appraisalsystem. Using LOS facility customers will also be able to apply for loans through Bank'swebsite and can avail the facilities like option of Branch selection while applying forLoan tracking of the status of loan application and information on pendency reasonsthrough e-mail/SMS. These processes will enhance transparency with priority of complianceover business. These improvements in processes will minimize the response time and ensuresbetter asset quality.
Bank will focus on strengthening its customer reach techniques by tie up with fewFintech firms who are having expertise financial analytics. Bank will focus on Digitaladoption in every area to meet the customer preferences in the fast changing world.
COVID 19 has disrupted economic activity of India and across the Globe. The situationcontinues to be uncertain and Bank is closely monitoring the same. Bank will continuouslyin touch with our borrowers and will provide financial support to the borrowers on merits.
I acknowledge and thank all the members of the Board for their valued support andguidance extended to the management in all the endeavors I also acknowledge the dedicationand hard work shown by the employees of the Bank.
I look forward for continued support from all the stakeholders.
(A. K. Goel)
Managing Director &
Chief Executive Officer