India's oil import from Iran has helped state-owned Uco Bank cut losses by 27% in the fourth quarter as the bank gained Rs 13000-Rs 14000 crore of interest free floating fund from Indian oil refiners.
Uco has been one of the designated banks for settling payments for India's oil imports from Iran under US sanction.a
The floating fund helped the bank's low cost current and savings accounts (CASA) rise to 43.5% at the end of March 31 from 35.5% a year back and cost deposit fall 31 basis points to 4.87% on quarterly basis.
"Iran (oil import) has contributed to Uco's good performance," bank's executive director Charan Singh said.
Under US sanction, Indian oil refiners used to make payment to the designated rupee-account at Uco for importing oil from Iran. The Kolkata-based lender, in turn, made payments to Iranian exporters for exporting goods to India.
But now India has stopped purchases of Iranian oil in the wake of renewed US sanctions. "We aim to substitute the floating fund by normal deposit ," Uco's chief executive director AK Goel said, after announcing the financial results.
Uco has curtailed the fourth quarter loss to Rs 1552 crore from Rs 2134 crore. This was the bank's 14th consecutive quarterly loss.
"But I promise you FY20 will be a wonderful year for Uco Bank and we expect to be back in black in fourth quarter and get out of prompt corrective action this fiscal,"
Its operating profit grew over six times at Rs 691 crore from Rs 112 crore while net interest margin improved to 1.84% for the fourth quarter from 1.32% in the year ago period.
The lender's gross non performing assets shrunk to Rs 29888 crore (25%) as against Rs 31122 crore (27.4%) a quarter back. Net NPA ratio improved to 9.7% from 12.5% on a quarter-to-quarter basis.
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