UCO Bank Q1 profit rises 8 pc to Rs 656 cr, plans to mobilise USD 500 mn from FCNR, OFCB
· Free Press Journal
State-owned UCO Bank on Wednesday reported an 8 per cent increase in net profit at Rs 656 crore for the June quarter as core income improved.
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The Kolkata-based bank had earned a net profit of Rs 607 crore in the same quarter of the previous financial year.
Total income rose to Rs 8,682 crore during the June quarter of 2026-27, from Rs 7,433 crore a year ago, UCO Bank said in a regulatory filing.
Interest earned by the bank improved to Rs 6,996 crore, as compared to Rs 6,436 crore in the June quarter of FY26.
Net interest income (NII) grew 17 per cent to Rs 2,808 crore as against Rs 2,403 crore for the June quarter, UCO Bank acting MD and CEO Rajendra Kumar Saboo said.
On FCNR(B) deposit mobilisation under the Reserve Bank of India's special window, he said the bank is looking to mobilise USD 500 million from both deposits and bonds.
"We are planning to raise about USD 250 million from FCNR(B) and an equal amount via Overseas Foreign Currency Borrowings (OFCBs) depending on market condition," he said.
So, the total mobilisation from overseas markets will be to the tune of USD 500 million by December.
In a bid to attract foreign currency deposits by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs), the RBI last month withdrew the interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) deposits of 3-5 years' maturity. The special window is open till September 30.
The move came after FCNR(B) deposit inflows weakened sharply, with net inflows dropping to just USD 946 million in FY26, down from USD 7.1 billion in FY25.
In 2023, the RBI had introduced similar schemes when dollar outflows were high, triggered by the taper tantrum.
On further capital raise, Saboo said the bank has capital adequacy ratio of over 19 per cent so there is no need of fund for growth but government holding is more than 90 per cent.
Going forward, he said there would be equity dilution to meet the Sebi requirement of minimum public sharholding norm.
The bank has already obtained the board approval for equity capital raise for bringing down the government's stake, he added.
Besides, he said, the bank is set to launch 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.
During the period, operating profit of the bank also increased to Rs 2,810 crore from Rs 1,562 crore a year ago.
The bank's asset quality improved as gross non-performing assets (NPAs) declined to 2.08 per cent of gross advances at the end of the June quarter, from 2.63 per cent a year ago.
Similarly, net NPAs, or bad loans, declined to 0.25 per cent from 0.45 per cent in the year-ago period.
As a result, provisions for bad loans moderated significantly to Rs 254 crore during the first quarter as compared to Rs 463 crore in the same period a year ago.
Provision Coverage Ratio increased to 97.85 per cent as compared to 97.85 per cent at the end of the first quarter of the previous financial year.
However, return on assets (ROA) declined to 0.68 per cent in June 2026 from 0.71 per cent a year ago.
Capital adequacy ratio of the bank rose to 19.03 per cent, from 18.39 per cent in the same quarter of FY26.