Thanks to higher revenue from core operations, UCO Bank posted an 86% increase in net profit to Rs 581 crore for the March quarter.
The bank has received interest from around 10 to 12 banks in Russia and Africa for opening rupee accounts, said Soma Shankara Prasad, MD and CEO of UCO Bank. The bank currently has a special rupee account with Gazprombank of Russia. However, the volume of transactions has not increased yet, although the infrastructure is already in place.
Net Interest Income (NII) increased by almost 19% to Rs 1,972 crore during the quarter in question. However, on a sequential basis, net profit decreased by 11 per cent from ₹653 crore during the third quarter ending 31 December 2022 due to higher provisioning.
Total procurement during the quarter increased by almost 36% on a quarter-on-quarter basis to Rs 451 crore during the quarter under review.
The bank has witnessed an improvement in asset quality with the percentage of gross non-performing assets (NPA) dropping to 4.78% (7.89%) and net NPA lowering at 1.29% (2.7%).
Also Read: UCO Bank Targets ₹2,500 Cr Profit In FY24
During FY23, the bank recorded a 100 per cent increase in net profit to ₹1,862 crore. The NII for the year rose 13 per cent to ₹7343 crore on the back of healthy loan portfolio growth and improving advance yield.
Net interest margin for FY23 increased marginally to 2.87% from 2.81% last year.
The bank’s board approved the raising of capital to the tune of ₹2,000 crore in one or more tranches during FY24 through various options including follow-on public offering and qualified institutional placement, among others. .
Rupee Payment Mechanism
“We have received interest from 10 to 12 banks in Russia and some in Africa for opening rupee accounts,” Prasad told reporters during a virtual news conference on Tuesday.
In order to promote exports, the Reserve Bank of India issued a circular in July last year allowing trade deals between India and other countries in INR with immediate effect.
Indian importers importing through this mechanism will be required to make payments in INR, which will be credited to the vostro special account of the partner country’s correspondent bank, against commercial invoices.
The bank’s bond closed at 30.72, up 2.06 percent from its previous close on the BSE on Tuesday.