State-owned Uco Bank has cut net losses by 21.5% at Rs 892 crore for the September quarter on higher net interest income and treasury earnings. It had net loss of Rs 1,136 crore in the year ago period.
Uco's operating profit grew 139% at Rs 1207 crore -- the highest in last 16 quarters, but 44% higher provisions against bad loans at Rs 2034 crore forced the lender to book net losses for the 16th quarter in a row.
The bank's overall asset quality improved with gross non-performing assets ratio falling to 21.87% at the end of second quarter from 25.37% a year back but the lender had to make higher provisions because of fresh slippages of Rs 1378 crore and on account of ageing provisions, managing director AK Goel told ET.
Net NPA ratio improved to 7.32% from 11.97% in the same period. The bank had earlier in the month reported Rs 1223 crore divergence in asset classification as on March.
Our effort will hereon be on how to increase operating profit and net interest income," Goel said. The bank's cost of deposits have fallen to 4.97% from 5.16% with current and savings account ratio to total deposits improving to 40.55% from 36.96%.
Its interest income rose 31.3% at Rs 1266 crore while it booked a trading profit of Rs 368 crore compared with Rs 277 crore in the year ago period.
Goel said his bank has followed the earlier income tax rules for the quarter and half year and is evaluating the option to adopt the new tax rules as amended by the government recently.
"The bank has recognised deferred tax asset of Rs 8,086.37 crore on carry forward losses up to March 31. During the quarter, the bank has recognised deferred tax assets of Rs 542.47 crore," it said in a regulatory filing.
During the second quarter to September 2019 period, the central government infused Rs 2,130 crore by way of preferential allotment of equity shares. With this, Uco's capital adequacy ratio improved to 11.44% from 10.88% three months back.
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