UCO Bank Q1 Profit Rises 8% to Rs 656 Crore

UCO Bank, a state-owned bank, has reported an 8% increase in net profit at Rs 656 crore for the June quarter of 2026-27. The bank's total income rose to Rs 8,682 crore during the quarter, up from Rs 7,433 crore in the same period last year.

The bank's interest earned improved to Rs 6,996 crore, compared to Rs 6,436 crore in the June quarter of FY26. Net interest income (NII) grew 17% to Rs 2,808 crore, up from Rs 2,403 crore in the same quarter last year.

According to Rajendra Kumar Saboo, UCO Bank's acting MD and CEO, the bank is planning to mobilise USD 500 million from both FCNR(B) deposits and Overseas Foreign Currency Borrowings (OFCBs) by December. This includes raising USD 250 million from FCNR(B) and an equal amount via OFCBs, depending on market conditions.

The Reserve Bank of India (RBI) had introduced a special window for FCNR(B) deposits, which allows banks to raise foreign currency deposits from Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs). The RBI had withdrawn the interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) deposits of 3-5 years' maturity last month.

UCO Bank's asset quality improved during the quarter, with gross non-performing assets (NPAs) declining to 2.08% of gross advances, down from 2.63% in the same period last year. Net NPAs, or bad loans, also declined to 0.25% from 0.45% in the year-ago period.

The bank's operating profit increased to Rs 2,810 crore, up from Rs 1,562 crore in the same quarter last year. Provisions for bad loans moderated significantly to Rs 254 crore during the quarter, compared to Rs 463 crore in the same period last year.

The bank has a capital adequacy ratio of over 19% and does not need funds for growth. However, the government's holding is over 90%, and the bank plans to dilute equity to meet the Sebi requirement of minimum public shareholding norm. The bank has already obtained board approval for an equity capital raise to bring down the government's stake.

UCO Bank is also set to launch an IFSC Banking Unit (IBU) at GIFT City in Gandhinagar. The bank has a branch each in Singapore and Hong Kong and a representative office in Iran.

The improvement in UCO Bank's financial performance is a positive sign for the banking sector. The bank's plans to mobilise funds from overseas markets and improve its asset quality are expected to support its growth in the coming quarters.

The Indian banking sector has been facing challenges in recent years, including a rise in non-performing assets and a decline in credit growth. However, the sector has been showing signs of improvement, with many banks reporting an increase in profit and a decline in NPAs.

UCO Bank's performance is a reflection of the overall improvement in the banking sector. The bank's plans to raise funds from overseas markets and improve its asset quality are expected to support its growth and contribute to the overall growth of the Indian economy.

In conclusion, UCO Bank's Q1 profit increase and plans to mobilise funds from overseas markets are positive signs for the bank and the Indian banking sector. The bank's improvement in asset quality and operating profit are expected to support its growth in the coming quarters and contribute to the overall growth of the Indian economy.