UCO Bank would aim to de-risk its balance sheet by reducing its exposure to big corporate accounts, particularly in the stressed sectors.
According to Mr N.R. Badrinarayanan, Executive Director, more than 60 per cent of the banks' total advances lie in the corporate sector at present, while retail accounts for a miniscule 8.5 per cent.
“We want to de-risk the balance sheet by reducing our exposure to big accounts,” Mr Badrinarayanan said.
Talking about stress in large accounts, he said the restructured assets grew to Rs 7,370 crore during the year, from Rs 6,345 crore last year. “There is stress in some sectors like aviation, steel, power and infrastructure. We want to go slow on these sectors.”
The bank would aim to increase the share of retail in its overall business. “We are planning to shed high cost bulk deposits and CDs, which account for almost 46 per cent of our total deposits at present,” he said.
The focus would be on increasing the share of current account and savings bank account deposits to 27-28 per cent (23 per cent at present) by the end of this fiscal, he added.
Backed by higher interest earnings, UCO Bank posted 12 per cent rise in net profit to Rs 253 crore for the quarter ended March 31, compared with Rs 226 crore in the same period last year.
Net interest income grew by 25 per cent to Rs 1,051 crore.
The bank has proposed a dividend of 30 per cent for 2011-12, which means Rs 3 a share of face value Rs 10. On a sequential basis, however, profits declined by 24 per cent from Rs 333 crore during third quarter ended December 31, 2011.
“The profits would have been more but for higher provisioning for non-performing assets of Rs 379 crore during the fourth quarter, as against Rs 94 crore during same period last year,” said Mr Arun Kaul, Chairman and Managing Director.
Slippages during the quarter came down to Rs 800 crore (Rs 1,100 crore).
Percentage of net non-performing assets to advances went up marginally to 1.90 per cent (1.84 per cent). Net interest margin was at 2.71 per cent (2.35 per cent).