Riding on the back of higher income from core operations, UCO Bank registered 86 per cent rise in net profit at ₹581 crore for the March quarter.
The bank has received interest from around 10-12 banks in Russia and Africa for opening rupee accounts, said Soma Shankara Prasad, MD & CEO, UCO Bank. The bank has a special rupee account with Russia’s Gazprombank at present. However, the volume of transactions is yet to pick up though the infrastructure is in place.
Net interest income (NII) increased by nearly 19 per cent at ₹1972 crore during the quarter under consideration. On a sequential basis, however, net profit came down by 11 per cent from ₹653 crore during the third quarter ended December 31, 2022 on the back of higher provisioning.
Total provisioning during the quarter was up by nearly 36 per cent on a QoQ basis at ₹451 crore during the quarter under review.
The bank has witnessed an improvement in asset quality with the percentage of gross non-performing asset (NPA) coming down to 4.78 per cent (7.89 per cent) and net NPA coming down to 1.29 per cent (2.7 per cent).
Also read: UCO Bank aims for ₹2,500 cr profit in FY24
During FY23, the bank posted a 100 per cent rise in net profit at ₹1862 crore. NII during the year increased by 13 per cent at ₹7343 crore on the back of healthy growth in loan book and improved yield on advances.
Net interest margin during FY23 was marginally up at 2.87 per cent as against 2.81 per cent last year.
The bank’s board has approved capital raising to the tune of ₹2,000 crore in one or more tranches during FY24 through various options, including follow on public offer and qualified institutional placement among others.
Rupee payment mechanism
“We have received interest from 10-12 banks in Russia and some in Africa for opening rupee accounts,” Prasad told newspersons during a virtual press conference on Tuesday.
In order to promote exports, the Reserve Bank of India had issued a circular in July last year allowing trade settlements between India and other countries in INR with immediate effect.
Indian importers undertaking imports through this mechanism will have to make payments in INR, which would be credited into the special vostro account of the correspondent bank of the partner country, against the invoices for trade.
The bank’s scrip closed at 30.72, up by 2.06 per cent from its previous close on the BSE, on Tuesday.