Uco Bank chairman and managing director V. Sridar (right) and executive director B. K. Dutta in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, June 10: Uco Bank has set a target of achieving Rs 1000 crore in operating profits and Rs 550 crore in net profit this fiscal.

For the year ended March 31, the bank reported a net profit of Rs 346 crore against Rs 435 crore in the previous fiscal, primarily because of a sharp decline in income from treasury operations. Operating profit over the period has also come down from 2.12 per cent to 1.73 per cent.

However, the bank believes its profit growth in the current fiscal will come on the back of a higher business, which it pegs at Rs 1,00,000 crore against Rs 77,704 crore achieved in 2004-05.

“We have put in place definitive plans, programmes and strategies, with supportive administrative measures for their implementation at the grass-root levels, to achieve these ambitious targets,” said Uco Bank chairman and managing director V Sridar while addressing the shareholders at the bank’s second annual general meeting in the city today.

The bank has shortlisted five consultants for organisational restructuring needed to achieve the targets.

“These firms would be making presentations to us soon,” explained Sridar while talking to reporters at the sideline of the shareholders’ meeting.

The bank is also looking at the possibility of floating a preferential issue as apart of its capital restructuring exercise ramp up its capital base on the lines of the Basel-II norms and capital requirement for business expansion.

The preferential issue would be followed by another round of public issue to set the balance between the bank’s Tier-I and Tier-II capital. “This will also help the bank jack up its earning per share (EPS) and provide better shareholders’ value,” said Sridar.

The bank has entered into talks with merchant bankers Morgan Stanley and Merrill Lynch for finalising the package that is likely to be effected in the third quarter of the current financial year.

A large capital base of Rs 799 crore and a minimal reserve has been acting a deterrent against a rising earning per share and unlocking shareholders’ value.

The bank’s reserves have declined to a minimal following adjustment of accumulated losses.

Talking about non-performing assets (NPAs), Sridar said, “The bank is targeting to bring down the net NPA to 2.5 per cent.”