Kolkata-based UCO Bank posted a 11 per cent rise in net profit to Rs 333 crore for the quarter ended December 31, 2011, against Rs 301 crore in the corresponding year-ago period.
Net interest income, however, dipped by three per cent to Rs 103 crore during the period under review.
Shares of UCO Bank rose by 3.71 per cent to close at Rs 71.30 on the BSE on Wednesday.
Kingfisher exposure
The bank witnessed fresh slippages to the tune of Rs 537 crore, of which, Rs 291 crore is due to its exposure to Kingfisher Airlines.
“We started the cleaning up of our balance-sheet last year. There are legacy issues which we are facing,” said Mr Arun Kaul, Chairman and Managing Director, UCO Bank.
The high cost of deposits has impacted the bank's net interest income and net interest margin, Mr Kaul said. NIM stood at 2.89 per cent (3.11 per cent).
“NIM would otherwise have been much more but for a 10 per cent rise in interest on deposits and large NPA,” he said.
The bank is however hopeful of keeping the NIM around 3 per cent by the end of the fiscal.
The percentage of gross and net non-performing assets to total advances increased to 3.49 (2.57) and 2.04 (1.13) respectively.