These PSU Banks to get Rs.8,655 crore for preferential allotment

The government has approved releasing Rs.8,655 crore to three public sector lenders -- Allahabad Bank, Indian Overseas Bank (IOB) and UCO Bank -- for preferential allotment of shares.

The Ministry of Finance has approved infusing fresh capital amounting to Rs.2,153 crore in Allahabad Bank, Rs.2,142 crore in UCO Bank and Rs.4,630 crore in IOB via for preferential allotment of shares.

Fresh capital infusion by the government is a part of the announcement made by Finance Minister Nirmala Sitharaman, in her maiden Budget on 5 July.

Sitharaman had first proposed a capital infusion Rs.70,000 crore in public-sector banks in two phases. First, banks were to subscribe to bonds floated by the government and in the second phase, the government was to infuse the money into these banks.

As of 20 November, the government had infused Rs.60,314 crore in public-sector banks of the total of Rs.70,000 crore that was announced for these banks.

At 12.16pm, the shares of Allahabad Bank were nearly 8% up at Rs.19.15 apiece. Shares of UCO Bank were higher by 3.6% and IOB nearly 9% at Rs.17.40 and Rs.12.25 , respectively.

All these three banks are currently under the Reserve Bank of India’s prompt corrective action (PCA) framework and their ability to exit the same will be driven by a reduction in net non-performing asset ratio to less than 6.0% and maintenance of capital conservation buffer, which further depends on the capital infusion by the government.

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UCO Bank net loss narrows in Q2FY20

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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This PSU bank very much confident to coming out from PCA

Public sector lender UCO Bank is confident of coming out of the RBI's Prompt Corrective Action (PCA) framework by March next year and hopes to turn profitable by the last quarter of fiscal year 2020, its MD and CEO Atul Kumar Goel said on August 18.

The Reserve Bank of India's PCA framework kicks in when banks breach any of the four key regulatory trigger points, namely capital-to-risk weighted assets ratio, net non-performing assets, return on assets (profitability), and leverage ratio.

"We are growing quarterly, and we have pledged to come out of the PCA framework. I am hopeful and confident we will come out of PCA by March 2020," Goel told reporters on the sidelines of the bank's meeting of branch heads.

"In the quarter ending June 2019, we have shown an operating profit of Rs 1,201 crore. It is the highest in the last fourteen quarters. Loss is only on account of NPA provision. If we recover from NPA, this provision will reduce and we will come into profitability," Goel added.

Speaking on the NPA front, he said, "Our NPA in March 2019 was Rs 29,786 crore. It has reduced to Rs 29,432 crore. Net NPA in March 2019 was Rs 9,650 crore, and it has come down to Rs 8,782 crore in June quarter."

Goel said the bank had set an NPA recovery target of Rs 2,000 crore per quarter, or Rs 8,000 crore per year, in addition to cases referred to National Company Law Tribunal (NCLT).

"In NCLT cases, I am confident, within this quarter, as on date, we should be in a position to recover at least Rs 1,500 crore from three-four big accounts. This will be done in December if not in September," he said.

The Sunday meeting was part of the Union finance ministry's directives to PSU banks to hold consultation and seek suggestions from officers starting from branch level, in order to align banking with national priorities.

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Uco Bank Q1 result, net loss narrows

State-owned UCO Bank on Thursday reported narrowing of its net loss to Rs 601.45 crore for the first quarter ended June 30, as bad loan provisioning declines. 

The bank had posted a net loss of Rs 633.88 crore in the corresponding April-June period of the previous financial year. 

Its total income in the June 2019 quarter rose to Rs 4,446.61 crore as against Rs 4,360.88 crore in the year-ago quarter, the bank said in a regulatory filing. 

The bank’s asset quality witnessed slight improvement, with the gross non-performing assets (NPAs) standing at 24.85% of the gross advances as at the end of June 2019, as against 25.71% a year ago. 

Net NPAs stood at 8.98%, down from 12.74%. In terms of absolute value, the gross NPA was Rs 29,431.60 crore, compared with Rs 29,786.41 crore in the year-ago period. Net NPAs were Rs 8,781.97 crore by the end of the first quarter this fiscal, as against Rs 12,558 crore a year ago. 

Thus, there was a decline in provisions for bad loans for the quarter at Rs 1,374.97 crore, against Rs 2,038.33 crore in the corresponding period a year ago. The overall provisions and contingencies stood at Rs 1,802.89 crore, compared with Rs 1,781.28 crore a year ago.

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Four PSU Banks fined for violation of KYC norms by RBI

The Reserve Bank of India (RBI) has imposed a penalty of Rs 1.75 crore on four public-sector banks, including PNB and UCO Bank, for non-compliance with KYC requirement and norms for opening of current accounts. While PNB, Allahabad Bank and UCO Bank have been fined Rs 50 lakh each, a Rs 25-lakh penalty has been imposed on Corporation Bank.

Giving details, the RBI said the penalty has been imposed for non-compliance with certain provisions of directions issued by it on know your customer norms or anti-money laundering standards and opening of current accounts. The action, however, is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers, the RBI added.

In a stock exchange filing on Tuesday, UCO Bank said, “We inform that the RBI in exercise of powers conferred under Section 47 (A) (1) (c) read with Section section 51 and 46 (4) (1) of the Banking Regulation Act, 1949, has imposed a penalty of Rs 5 million (Rs 50 lakh) on UCO Bank for non-compliance of RBI directives on ‘KYC norms/AML standards/CFT/obligation of banks and financial institutions under PMLA 2002’ and also on ‘opening of current accounts by banks — need for discipline’.”

Similarly, Allahabad Bank, in a stock exchange filing, said the RBI has imposed a penalty of Rs 50 lakh on the bank for non-compliance of the directions issued the by RBI on “KYC norms/AML standards” and “opening of current accounts”.

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Uco bank Q4 result, net loss narrowed

State-owned UCO Bank Tuesday said its net loss has narrowed to Rs 1,552.02 crore in March 2019 quarter, amid a persistent high level of bad loan ratio.  The bank had reported a net loss of Rs 2,134.36 crore during the corresponding January-March quarter of 2017-18. 

Sequentially, the loss in March 2019 quarter was higher than Rs 998.74 crore in the December quarter of 2018-19. 

Thus, for the entire financial year, there was a net loss of Rs 4,321.09 crore, against Rs 4,436.37 crore loss in 2017-18. 

Its total income in the March quarter rose to Rs 4,148.52 crore as against Rs 3,424.65 crore in the corresponding quarter of the previous fiscal, the bank said in a regulatory filing. 

In full 2018-19, the total income moved up to Rs 15,844.14 crore as against Rs 15,141.13 crore. 

The Kolkata-headquartered bank witnessed worsening in its gross bad loan ratio at 25 per cent of the gross advances at end-March 2019, against 24.64 per cent by the end of March 2018. In the December quarter, the non-performing asset (NPA) ratio was 27.39 per cent. 

However, the net NPAs were trimmed to 9.72 per cent by the end of 2018-19 as against the year-ago period's 13.10 per cent. It was at 12.48 per cent by the end of December 2018. 

Provisioning requirement for bad loans for March 2019 quarter stood at Rs 2,601.80 crore as against Rs 3,133.52 crore a year ago. 

The bank's total assets grew to Rs 2,30,484.08 crore as on March 31, 2019, from Rs 2,16,056.18 crore a year ago. 

UCO Bank also showed a divergence of (-) Rs 2.68 crore in gross NPAs for 2017-18, and (-) Rs 663.44 crore in net NPAs. The divergence in provisioning stood at Rs 660.76 crore in 2017-18, it said. 

Thus, on an adjusted basis, there was net loss of Rs 5,099.81 crore during 2017-18.

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UCO Bank net loss drops marginally in Q3FY19

State-owned UCO Bank on Friday reported a marginal drop in its net loss at Rs 998.74 crore for third quarter ended December 31, 2018, as bad loans and provisions ballooned.

The bank had posted a net loss of Rs 1,016.43 crore in the same quarter of the previous fiscal.

Total income of the bank also came down to Rs 3,585.56 crore during the October-December period of 2018-19, as against Rs 3,721.93 crore in same quarter of 2017-18, the bank said in a regulatory filing.

The Kolkata-headquartered lender, witnessed worsening asset quality as the gross non-performing assets (NPAs) ballooned to 27.39 per cent of gross loans as on December 31, 2018, from 20.64 per cent in December 2017.

Sequentially also, NPAs were higher from 25.37 per cent by end of second quarter ended September of this fiscal.

Also read- Q3FY19 Results of all Public & Private Sector banks in India 

In value terms, the gross NPAs or bad loans stood at Rs 31,121.79 crore as on December 31, 2018 as against Rs 25,382.40 crore a year-ago.

Net NPAs were 12.48 per cent by end of third quarter as against 10.90 per cent. Value-wise, the net NPAs were Rs 11,755.61 crore, lower than Rs 11,923.45 crore last year.

Thus, provisioning for bad loans during the quarter that ended on December 2018 were hiked to Rs 2,243.85 crore as against Rs 1,682.40 crore a year earlier. The non-performing loan provisioning coverage ratio is 69.49 per cent as on December 31, 2018, UCO Bank said.

The bank said in respect of select borrower accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), it was required to make additional provision where provision as per Income Recognition and Asset Classification (IRAC) norms lower than the provision required.

“Accordingly, the bank has made additional provision of Rs 242.60 crore in respect of select borrower accounts for the quarter ended December 2018,” it said. The bank also suffered losses due to depreciation in investment, UCO Bank said.

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UCO Bank Q2 net loss widens as bad loans rise

State-owned UCO Bank Monday reported widening of net loss to Rs 1,136.44 crore for the second quarter of 2018-19, on rising bad loans. The bank had registered a net loss of Rs 622.56 crore in the September quarter of 2017-18. In the June quarter this fiscal, the company’s net loss stood at Rs 633.88 crore.

Total income also fell to Rs 3,749.18 crore in the reported quarter as against Rs 3,757.51 crore in the same period of 2017-18, the bank said in a BSE filing.

The bank’s asset quality worsened as the gross non-performing assets (NPAs) soared to 25.37 per cent of the gross advances as on September 30, 2018 as against 19.74 per cent by the end of September 2017.

Net NPAs were 11.97 per cent as compared to 9.98 per cent in the year-ago period.

In absolute terms, gross NPAs or bad loans stood at Rs 29,581.49 crore at end-September 2018 as against Rs 24,434.95 crore earlier. Net NPAs rose to Rs 11,820.21 crore from Rs 11,008.23 crore.

Due to mounting NPAs, the bank hiked the provisions for bad loans to Rs 1,410.94 crore during the reported quarter, up from Rs 1,323.36 crore in the year-ago period.

The non-performing loan provisioning coverage ratio is 67.61 per cent as on September 30, 2018, UCO Bank said.

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PNB and Canara bank were on government's list for next merger, with which bank?

Bank of Baroda’s healthier financials, strong brand, technology and international presence helped the finance ministry settle for it as the anchor for an amalgamation with Dena bank and Vijaya Bank, instead of Canara Bank and Punjab National Bank, among others, which were considered for carrying forward the first consolidation exercise in the public sector space.

PNB was ruled out as its recovery is seen to be a few quarters away after a Rs 14,000-crore fraud, allegedly orchestrated by Nirav Modi and Mehul Choksi, leaving Canara Bank as the other option to anchor the amalgamation. But it was seen to be weak on a few financial parameters. Besides, the new entity would have been focused more on south India.

Financial services secretary Rajiv Kumar said, “We did not want consolidation for the sake of it. The first guiding principle was to create a healthy bank that was large in size. The second principle was to have an entity that had a strong brand, technology and a good reach.”

The merger of the three banks is one of the many ways through which the government is trying to deal with the bank NPA crisis. The merger of three banks clearly unveils a formula -  that the government decided to merge the three banks in accordance with their financial health. Among the three, Bank of Baroda has least NPA problem, followed by Vijaya Bank and Dena Bank. The bank merger formula, thus, will be Very big bank+ better bank+worst bank. 

In Dena bank, Vijaya and BoB, the government found the right fit. “Dena bank has a strong CASA base with a good retail and MSME presence. Vijaya Bank has been sensible in its lending, while BoB offers a good international presence, a strong brand and a good tech platform. It’s a win-win deal for the three banks and will result in a massive cost rationalisation,” the secretary added.

While consolidation has been on the government’s radar, the fraud at PNB pushed back the plan by a few months. But it has been in the making for at least four-five months, with the team at the department of financial services looking at various permutations and combinations. A source said, “It was an in-house exercise. Secrecy had to be maintained at all costs.”

Two sets of probable bank mergers in future. It said that the government is mulling the merger of more banks. However, this year there will not be any further merger as the amalgamation of the first lot of three banks will itself take 3-6 months. 

1. Punjab National Bank, Indian Bank, Indian Overseas Bank

The current business of PNB, Indian Bank and Indian Overseas Bank range in Rs 10,45,650 crore, Rs 3,74,550 crore and Rs 3,61,928 crore respectively. The deposits in three banks are Rs 630311 crore, Rs 210170 crore, Rs 213168 crore respectively. 

The Net NPA of PNB is 10.58%, Indian Bank 3.80% and Indian Overseas Bank 15.10%. The number of branches of these three banks are 6,993, 2,819 and 3,326 respectively. 

2. Canara Bank, Syndicate Bank and UCO Bank 

The total business of Canara Bank, Syndicate Bank and UCO Bank is Rs 8,63,359 crore, Rs 4,74,976 crore and Rs 2,76,784 crore respectively. Deposits in the three banks are Rs 5,00,866 crore, Rs 4,05,939 crore and Rs 1,78,211 crore.

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UCO Bank narrows loss in Q1FY9

State-owned UCO Bank on Friday reported a net loss of Rs.633.88 crore for the first quarter ended June 2018. This first quarter loss, however, has narrowed both on annual and sequential basis.

During April-June period of 2017-18, its net loss stood at Rs.663.02 crore. While in the March quarter of FY2017-18, loss was Rs.2,134.36 crore. However, total income in April-June 2018 increased to Rs.4,360.88 crore from Rs.4,237.04 crore in the same period a year ago, the bank said in a regulatory filing.

Bank’s asset quality worsened with the gross non-performing assets (NPAs) hitting 25.71% of gross advances as on 30 June 2018 as against 19.87% by end-June 2017.

In absolute value, the gross bad loans or NPAs stood at ₹29,786.41 crore by the end of the first quarter of this fiscal, up from Rs.25,054.21 crore. Net NPAs were 12.74 per cent (Rs.12,558 crore) as against 10.63% (Rs.12,010.95 crore). Thus the provisions for bad loans were raised substantially to Rs.2,038.33 crore for the June quarter of FY’19 from Rs.1,204.25 crore a year ago.

UCO Bank said provision coverage ratio for non-performing loans is 65.15 per cent. The bank said it was required to make additional provisions with respect to accounts under provisions of Insolvency and Bankruptcy Code.

“Accordingly, the bank has made additional provision of ₹627.79 crore in respect of all NCLT admitted borrower accounts,” UCO Bank said.

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Uco Bank to recover ‘major amount’ via NCLT

State-run Uco Bank expects to recover a “major amount” from its bad assets through NCLT route as accounts eligible for insolvency resolution are being explored ‘vigorously’. The Kolkata-based lender’s total cash recovery plus upgradation for the last financial year stood at Rs 4290.12 crore, which met its expectations. However, this reduction in NPAs through cash recovery and upgradation was over 32% less than that of FY17.

Commenting on major focus areas of Uco Bank in its latest annual report, RK Takkar, MD & CEO, said: “The bank expects to recover a major amount in NPAs through NCLT resolution.” The lender has exposures to nine of the 12 large stressed accounts identified by the Reserve Bank of India (RBI) last year to get resolved under the Insolvency and Bankruptcy Code (IBC). The bank’s overall exposure to these nine accounts is around Rs 4,300 crore.

“We are looking to recover over Rs 4,000 crore in this fiscal (FY18) through cash recovery and upgradation,” Takkar had told FE in an interview earlier. He had said, for the turnaround, the bank was betting on recovery of stressed assets. RBI had initiated a prompt corrective action (PCA) against it in May last year in view of high non-performing assets and negative return on assets (RoAs).

In the annual report for the financial year 2017-18, Uco Bank said its recovery mechanism was geared up at all levels of the organisation. “Accounts eligible for NCLT are being explored vigorously. Bank closely remained in touch with other lenders/operational creditors, on regular basis, for discussion on way forward in respect of filing NCLT cases.

Most of the accounts under NCLT are consortium/multiple banking accounts, and are monitored for resolution on case to case basis in consultation with leader of consortium etc,” the bank said, adding, where it was leader of the consortium, it was meticulously following up each account for resolution.

“Recovery in loss assets has a direct impact on the profitability and the bank is giving priority in monitoring follow-up for recovery in such accounts. A separate vertical in the bank is monitoring consistently for recovery in loss assets including technically as well as prudentially written-off accounts,” it added.

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UCO Bank’s loss widens as provisions double in Q4

State-run UCO Bank on Friday posted a net loss of Rs 2,134.36 crore in the quarter ended on March 31 due to increase in provisioning for non-performing assets and fall in total income.

The lender had posted a net loss of Rs 588.19 crore in the corresponding quarter of 2016-17.

The bank's total income, in the quarter under review, fell by about 12 per cent to Rs 3,424.65 crore from Rs 3906.74 crore in the year-ago period.

The lender said its provisions for bad assets was at Rs 3,133.52 crore at the end of March 31, 2018 as against Rs 1,577.60 crore in the year-ago period.

It also said the government's holding at the end of the 2017-18 was 84.23 per cent, up from 76.67 per cent by end of the previous year, after the Centre recapitalised it. Its Basel III capital adequacy ratio was at 10.94 per cent.

Its gross non-performing assets went up to Rs 30,549.92 crore as on March 31, 2018, by about 36 per cent from Rs 22,540.95 crore in the year-ago period.

Gross non-performing assets as a percentage of total advances stood at 24.64 per cent at the end of March quarter, up from 17.12 per cent in same period last year.

Its net non-performing assets were at Rs 14,082.07 crore at the end of this quarter under review, as against Rs 10,703.39 crore as on March 31, 2017.

Net non-performing assets, as percentage, went up to 13.10 per cent at the end of FY18 (2017-18).

Its return on assets became negative at (-) 3.69 per cent at the end of March quarter as against (-) 1.07 per cent in the year-ago period.

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UCO Bank Q3 net loss widens,bad loans spike

Public sector UCO Bank widened its net loss to Rs 1,016.43 crore in the quarter ended December 2017 as gross bad loans ratio hit over 20 per cent, resulting into nearly doubling the amount for provisioning requirement.

The bank had reported a net loss of Rs 437.09 crore in the corresponding period of the previous fiscal. The losses were also higher compared sequentially against Rs 622.56 crore in the second quarter ended September of this fiscal.

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Forged Cheques Encashed, Supreme Court Orders PSB to Pay Rs 50 Lakh

The Supreme Court has ordered UCO Bank to pay Rs 50 lakh to a publishing firm for negligently clearing two cheques bearing forged signatures.

A bench of Justices Adarsh K Goel and Uday U Lalit observed that the public sector bank could not wriggle out of its liability in view of a departmental inquiry and a report by a handwriting expert, which pointed out that the fraud took place because of bank officials’ negligence.

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UCO Bank Q2 net loss widens

Public sector lender UCO Bank’s net loss widened to Rs622.56 crore in the quarter to September on the back of increasing non-performing assets, or NPAs.

The lender reported a net loss of Rs384.83 crore in the year-ago period.

Interest and non-interest income combined declined 23.95% to Rs3,757.51 crore from Rs4,941.41 crore a year ago. Interest income fell to Rs3,446.22 crore from Rs4,329.45 crore, a decline of 20.4%.

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UCO Bank's plan to stop salary to non performers(rumour)

As concern with Uco bank's employee and some senior we found that it's rumour. this post is published because of we received letter signed by GM.

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UCO Bank Q1 net loss widens

UCO Bank on Wednesday said its net losses widened to Rs663.02 crore for the first quarter ended 30 June, as asset quality deteriorated in the period. The bank had reported a net loss of Rs440.56 crore in the corresponding April-June quarter of 2016-17. The lender increased provisioning for bad loans by 28% to Rs1,204.25 crore during the June quarter.

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PSB merger: 7 banks miss August deadline to meet 25% public float norm

As discussions on the merger of some public-sector banks (PSBs) pick up pace, seven PSBs, especially United Bank of India, could miss the August deadline to meet the 25% public float norm. So the finance ministry may request capital markets regulator Securities and Exchange Board of India to extend the deadline for the PSBs, sources told FE. As of end-March, the government held more than 75% in seven PSBs — United Bank of India, Indian Bank, Bank of Maharashtra, Central Bank ofIndia, Punjab and Sind Bank, Indian Overseas Bank and UCO Bank.

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Five banks have reported gross NPA ratios of over 15%

Bad loan crisis of state-owned banks surged 56.4 per cent in the 12-month period ending December 2016. It is set to rise further in the next two quarters with the small and medium sectors struggling to repay the loans after the NDA government’s demonetization move in November 8. It was reported by The Indian Express that the gross non-performing assets (NPA) surged to Rs 614,872cr.

Despite the Reserve Bank of India (RBI) announcing numerous restructuring schemes, the bad loans have risen up from Rs 261,843cr by 135 per cent in last two years. They now constitute 11 per cent of of the gross advances of Public Sector Unit (PSU) banks. In all, the total NPAs including both the public and private sector banks were Rs 697,409cr in December 2016. These figures were compiled by Care Ratings.

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Uco Bank Q4 result, reports loss of Rs 588 crore

State-run Uco Bank has reported fourth quarter net loss of Rs 588 crore on account of lower income and poor asset quality, compared with Rs 1715 crore loss in the year ago period. This was Uco Bank's sixth straight quarter loss. 

The board of the Kolkata-based lender has approved the issuance of 75 crore fresh equity shares to raise capital by way of follow-on public offer or institutional placement or preferential allotment. The government has infused Rs 1150 crore in March by subscribing its preferential shares. 

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