UCO Bank has reported a drop in net profit at ₹1,137.80 crore for 2014-15 against ₹1,510.54 crore in 2013-14.
Total income, however, increased to ₹21,362.54 crore last fiscal from ₹19,550.42 crore in the previous financial year. It has recommended dividend of 20 per cent or ₹2 a share. Arun Kaul, CMD of the bank, said at a press conference that a slide in interest-free Iran deposits (for imports in rupee terms) on account of fall in crude oil prices, has “significantly impacted” the bank’s bottom-line.
Higher NPA provisioning also caused lower profits. NPA provisioning for the last year was ₹1,836 crore, up from previous year’s ₹1,419 crore. Kaul said that from a peak of ₹23,000 crore, Iran deposits currently stood at around ₹17,000 crore. UCO is the settlement bank for rupee trade (45 per cent of the total) between the two countries. Sluggish demand for loans coupled with burgeoning NPA queered the pitch for the performance of the bank. A substantial portion of the NPA was because of fresh slippage, including restructured loans. Power, steel and road sectors all saw fresh slippages.
In 2014-15, fresh NPA addition was of ₹7,551 crore, of which slippage from restructured loans to the NPA category was ₹2,559 crore.
To top it all, the bank faced problems in offloading non-performing loan assets to ARCs. During financial year 2015, the bank sold assets worth ₹483.77 crore to ARCs as against ₹1,869.06 crore in the previous year.
The UCO Bank stock declined 8.22 per cent to ₹56.95 on the BSE on Tuesday.