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UCO Bank reported an 8% year-on-year increase in its net profit for the first quarter of FY27, supported by higher income, improved interest earnings and a sharp rise in operating profit. The state-owned lender also recorded better asset quality, with both gross and net non-performing assets declining compared to the same period last year. Lower provisions for bad loans and a stronger capital adequacy ratio further strengthened its financial position, although its return on assets saw a marginal decline during the quarter.
State-owned UCO Bank reported an 8% year-on-year increase in its standalone net profit to INR 656 crore for the first quarter of FY27, compared with INR 607 crore recorded during the corresponding quarter of the previous financial year.
The Kolkata-headquartered public sector lender said in a regulatory filing that its total income increased to INR 8,682 crore during the quarter, up from INR 7,433 crore in the same period last year. Interest earned also rose to INR 6,996 crore from INR 6,436 crore, reflecting growth in the bank's core lending business.
The bank's operating performance remained strong during the quarter, with operating profit increasing to INR 2,810 crore from INR 1,562 crore in the year-ago period. The higher operating profit was supported by growth in income and continued improvement in operational efficiency.
UCO Bank also reported better asset quality during the quarter. Gross non-performing assets (GNPAs) declined to 2.08% of gross advances at the end of the June quarter, compared with 2.63% a year earlier. Net non-performing assets (NNPAs) also improved, falling to 0.25% from 0.45% during the corresponding period last year.
With the improvement in bad loan levels, the bank's provisions for non-performing assets reduced significantly. Provisions for bad loans stood at INR 254 crore during the quarter, compared with INR 463 crore in the same quarter of the previous financial year.
Despite the overall improvement in profitability and asset quality, the bank's Return on Assets (ROA), which measures how efficiently a bank generates earnings from its assets, moderated slightly to 0.68% from 0.71% recorded a year ago.
The bank further strengthened its capital position, with its capital adequacy ratio improving to 19.03% at the end of the quarter, compared with 18.39% in the corresponding period of the previous financial year. A higher capital adequacy ratio provides banks with a stronger buffer to absorb potential risks while supporting future credit growth.
UCO Bank has been steadily improving its financial performance over the past few years through a reduction in stressed assets, stronger recoveries and improved profitability. The latest quarterly results indicate continued progress in strengthening its balance sheet while maintaining adequate capital levels to support future business expansion.
Source PTI
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