Calcutta, July 25: Public sector Uco Bank has registered a 2 per cent increase in net profit at Rs 521.40 crore for the first quarter ended June, following a drop in provisions on account of bad loans.
Net profit stood at Rs 511.11 crore in the same period of the previous financial year.
Even though the bank’s net interest income rose 8.73 per cent to Rs 1,483 crore, the operating profit declined 5 per cent to Rs 1,202.06 crore on account of a lower profit from treasury operations.
The bank had made a total provision of Rs 517.14 crore against Rs 741.30 crore in the year-ago quarter.
Gross non-performing assets as a percentage of total advances declined to 4.31 per cent from 5.58 per cent in the same period a year ago.
The bank was also able to lower fresh NPA generation to Rs 592 crore against Rs 1,761 crore in the preceding quarter.
Chairman and managing director Arun Kaul attributed the lower provisions to increased recovery as well as the sale of bad assets worth Rs 265 crore to asset restructuring companies.
Kaul said operating profit fell because profit from treasury operations declined Rs 177.31 crore.
He added the yields from government securities were higher in the first quarter of the previous fiscal as a result of which the treasury profits were higher.
A payment of Rs 163 crore income tax on account of minimum alternate tax has also led to the fall in operating profit.
Kaul said the bank was focussing more on retail credit. “We are in the process of derisking the balance sheet and shifting the focus from large corporates to retail credit.”
The retail portfolio of the bank grew 77.63 per cent in the June quarter.
The bank made a total recovery of Rs 783.62 crore through cash recovery and the upgradation of accounts.
Total business grew 14.13 per cent to Rs 3,48,914.19 crore during the quarter.