UCO Bank (UCOBANK) Q4 05/06 earnings summary

Executive summary

• Total business reached ₹92,360.62 crore at 31 Mar 2006; advances grew 33.94% and deposits 10.26% during FY06.

• Operating profit rose to ₹852.10 crore from ₹838.49 crore; net profit fell to ₹196.65 crore from ₹345.65 crore, mainly on higher investment depreciation and standard-asset provisions.

• Gross and net NPA ratios improved to 3.27% and 2.10%, respectively; capital adequacy was 11.12%.

Financial highlights

• Interest income increased 22.71% YoY to ₹4,354.59 crore; interest expense rose 30.27% to ₹2,788.84 crore, taking net interest income to ₹1,565.74 crore, up 11.18%.

• Total income was ₹4,818.31 crore, operating expenses ₹1,177.37 crore, provisions and contingencies ₹655.45 crore, and net profit ₹196.65 crore.

• Q4 FY06 operating profit increased 44.55% YoY to ₹257.87 crore, while a ₹58.74 crore net loss followed provisions, including tax provisions, of ₹316.61 crore.

• Treasury profit on securities trading was ₹83.38 crore versus ₹195.79 crore in FY05; exchange profit was ₹32.01 crore, up 26.47%.

Outlook and guidance

• FY07 outlook anticipated continued Indian growth momentum, supported by manufacturing and services; priorities included credit quality and faster infrastructure investment.

• FY07 plans included implementing core banking in five pilot branches by June 2006 and extending it to 125 branches by March 2007, while preparing for Basel II and financial restructuring.

• Retail sales task forces were planned for 17 additional metropolitan centres; organizational restructuring and employee skills reorientation were also planned for FY07.