UCO Bank reports 43 per cent decline in net profit

Kolkata, Apr 29 (UNI) UCO Bank today reported 43 per cent drop in net profit of Rs 197 crore for the year ended March 31, 2006, as compared to Rs 346 crore in the corresponding period previous year.

The decline in profit was mainly due to increased provisioning for depreciation and amortization expenses in respect of investments (Rs 115 crore) and increased in provisioning towards standard advances (Rs 53 crore) consequent to RBI's guidelines on increase of provision for standard assets from 0.25 per cent to 0.40 per cent.

The Bank recorded operating profit of Rs 852 crore as against Rs 838 crore in the previous year despite reduced profit on sale of investments to the tune of Rs 113 crore.

Net of treasury profit and the operating profit for 2005-06 has shown an increase of 19.60 per cent over the previous year.

The Bank clocked a total business figure of Rs 92,362 crore during the year ended 31st March 2006 recording a growth of 18.86 per cent over the total business as of March 2005.

While deposits have registered a growth of 10.26 per cent from Rs 49,470 crore to Rs 54,544 crore.

Advances have increased from Rs 28,234 crore to Rs 37,817 crore representing a growth rate of 33.94 per cent.

The lower growth in deposits was due to the consious decision of the bank to fund the growth in advances through increased borrowing at a cheaper cost and reduction of investments.

Buoyed by this sound growth in total advances, UCO Bank's domestic market share too has gone up to 2.38 per cent from the last years 2.28 per cent.

The capital adquacy of the bank stood at 11.12 per cent as on March 31, 2006 as against 11.26 per cent as on March 31, 2005 despite robust credit growth of 34 per cent.

During the year, the bank recorded an increase in its net interest income which stood at Rs.1,566 crore, representing a growth of 11.22 per cent over the Rs 1,408 crore as on March 2005.

The year also witnessed improved recoveries in NPA accounts.

Total recovery amounted to Rs.481 crore as against Rs.399 crore in the previous year.

The bank is in the process of implementing a revised organisation structure suggested by M/s Boston Consulting Group.

The Bank has also started implementing Core Banking Solution and its expected that at least 150 branches would be on CBS by March 31, 2007.

The bank is also planning to double its ATM strength.

The bank also posted a robust growth of 30.10 per cent in agricultural advances and 27.43 per cent growth in SME advances during the year 2005-06.

UNI TJP JYN RN1728