Its net profit stood at Rs 205.4 crore as against Rs 30.1 crore in the year-ago period.
Net interest income (NIM), a key indicator of profitability, held steady at 2.79% for the quarter under review, despite lower lending rates.
“We expect NIM to be 3% or more in the near future,” said managing director AK Goel. He said that lower cost of funds, better collection efficiency from stressed accounts and higher credit growth would help in improving NIMs.
We expect advances to grow by around 10% for the full year, Goyal said.
The Kolkata-based lender’s operating profit jumped 24% to Rs 1,334 crore, from Rs 1,076 crore in the year-ago quarter. Net interest income grew nearly 15% to Rs 1,598 crore from Rs 1,393 crore in the same period last year. Other income grew 31.2% YoY to Rs 936 crore.
Goyal said the bank has made an additional provision of Rs 250 crore for Covid-19 related risk on asset quality, taking the total additional Covid related provisions to Rs 750 crore. Total bad loan provision increased to Rs 1,595 crore in the September quarter from Rs 1,032 crore in the year-ago period.
However, the bank’s total provisioning during the period declined to Rs 1,019 crore from Rs 1,301 crore due to write-back of provisions made earlier. The bank has recovered Rs 550 crore from the written-off accounts, taking the total recovery and upgradation during the quarter to Rs 1,876 crore.
UCO’s asset quality has improved and the gross non-performing assets (NPA) ratio fell to 8.98% at the end of September, from 11.62% a year ago. Net NPAs stood at 3.37%, down from 3.63%. Its provision coverage ratio increased from 89.82% to 90% in the same period.
Its total advances grew by 5.7% to Rs 1.22 lakh crore with retail, agriculture and MSME sectors now contributing around 64% of it.