UCO Bank (UCOBANK) Q4 04/05 earnings summary

Executive summary

• FY05 business volume rose 28.25% to Rs 77,704.16 crore; net profit fell to Rs 345.65 crore from Rs 435.42 crore, mainly due to lower gains on investment sales.

• Net interest income improved to Rs 1,406.37 crore from Rs 1,194.59 crore, while asset quality ratios improved and the capital adequacy ratio remained above the 9% requirement.

Financial highlights

• Operating profit was Rs 818.66 crore vs Rs 798.78 crore; interest earned was Rs 3,546.86 crore vs Rs 3,096.28 crore, and interest expended was Rs 2,140.49 crore vs Rs 1,901.69 crore.

• Total deposits rose 26.06% to Rs 49,470.24 crore; total advances increased 32.29% to Rs 28,233.92 crore.

• Investment-sale profit was Rs 195.79 crore vs Rs 351.30 crore, contributing to the decline in net profit.

Outlook and guidance

• Target: Rs 1 lakh crore of business by March 2006; priorities include productivity, profitability, stronger risk management and alignment with Basel II.

• Core banking rollout was planned to begin with 200 branches; pilot implementation at selected sites was expected in H2 FY06.

• Management expected recovery performance to improve further through fuller use of the SARFAESI Act and related recovery measures.