UCO Bank (UCOBANK) Q2 25/26 earnings summary

Executive summary

• Business grew 13.23% year-over-year, with global business reaching ₹5,36,398 Cr, deposits up 10.85%, and advances up 16.56%.

• Net profit for Q2 FY26 stood at ₹620 Cr (₹61,976 lakh), up 2.82% year-over-year; operating profit rose 12.69% to ₹1,613 Cr.

• Asset quality improved with Gross NPA at 2.56% and Net NPA at 0.43%, both declining year-over-year.

• RAM (Retail, Agri, MSME) advances grew 22.87%, now 65.23% of total advances; retail loans up 25.4%, housing loans up 18.94%, vehicle loans up 72.87%.

• Unaudited financial results for Q2 and H1 FY2025-26 were approved, with a limited review and unmodified auditor opinion.

Financial highlights

• Net interest income for Q2 FY26 was ₹2,533 Cr, up 10.10% year-over-year; fee-based income also up over 10%.

• Non-interest income declined 10.98% year-over-year to ₹884 Cr.

• Net interest margin (NIM) global at 2.90%, domestic at 3.08%, excluding a one-time INR 107 crore interest income.

• Cost-to-income ratio for Q2 FY26 was 54.06%; cost of deposit fell to 4.73% from 4.88% year-over-year.

• Provisioning coverage ratio at 96.99% as of 30 Sep 2025.

Outlook and guidance

• FY26 guidance: deposit growth 10–12%, credit growth 12–14%, GNPA below 2.5%, NNPA below 0.35%.

• NIM global guidance revised to 2.8–2.9% due to repo rate cuts; confident of further NPA reduction.

• Recovery and upgradation target INR 2,200–2,700 crore; achieved INR 1,548 crore in H1.

• Bank continues to recognize taxes under the old provisions of the Income Tax Act for the period.

• Maintains forward-looking provisions for SMA 1 & 2 accounts and Covid-19 related contingencies.