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This state run lender is getting strong loan demand from these two segments

business | Jan 25, 2023 6:43 PM IST

This state-run lender is getting strong loan demand from these two segments

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Prasad mentioned that slippages for the bank have come down drastically during the quarter.

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Buy / Sell UCO Bank share

State-run UCO Bank Ltd. is seeing strong traction within the home loan and car loan segments, according to its MD & CEO Soma Sankara Prasad.

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In an interaction with CNBC-TV18, Prasad said that loan growth for the bank has been strong over the last three quarters and that trend is likely to continue in the March quarter as well.
For the December quarter, UCO Bank's advances grew 22 percent year-on-year to Rs 1.44 lakh crore. On a sequential basis, loan growth stood at 7 percent.
Giving a break-up of the loan growth, Prasad said that corporate loan growth stood at 30 percent while retail loans grew 15 percent from last year. Personal loans saw growth of 23 percent year-on-year during the quarter.
UCO Bank's net profit doubled during the December quarter to Rs 653 crore, while Net Interest Income or core income of the bank grew 10 percent from last year as well as the previous quarter.
The lender's asset quality improved further during the December quarter, with gross NPA ratio falling to 5.63 percent from 6.58 percent in the September quarter. Net NPA also improved to 1.66 percent from 1.99 percent sequentially.
Prasad mentioned that slippages for the bank have come down drastically during the quarter and that recoveries have been higher than slippages over the last three quarters.
Other key takeaways:
- Transmission of rate hikes have helped NIMs improve
- Liquidity has been tightened and deposit rates have gone up
- Increase in cost of funds may impact NIMs going ahead
- Provision Coverage Ratio (93.6 percent) is third highest after IDBI Bank and Bank of Maharashtra
Shares of UCO Bank ended 2.4 percent higher at Rs 30.15.
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