Uco Bank net profit increases 177%

Public sector Uco Bank posted a 177.4% rise in net profit at Rs 86 crore during the fourth quarter of the fiscal ended March 31, 2008. For the financial year 2007-08, net profit of the bank increased by 30.4% to Rs 412 crore. The bank had to provide for Rs 130 crore for depreciation of securities - mark-to-market losses - in the last few days of the fiscal. The bank achieved a total business of Rs 1.35 lakh crore, up by 20.7% from the previous financial year. Total deposits increased 23.2% to Rs 79,909 crore, while advances grew 17.2% to Rs 55,627 crore. Its non-performing assets were at 1.98%. Increase in yield on advances and return on assets, apart from robust recovery were the main drivers for growth.

The finance ministry is expected to approve the conversion of Rs 300 crore of equity into preference shares. Once this comes through, its capital will come down from 800 crore at present to Rs 500 crore. Additional capital of Rs 100 crore will be raised through a Follow on Public Offer in the third quarter of current fiscal. Meanwhile it is also planning to raise Rs 325 crore through perpetual non-cumulative preference shares by June.

The bank has a capital adequacy ratio of 10.09%, which has made itself Basel -II compliant during the year. As per Basel-II, the capital adequacy was 11.02%. The bank is looking for a 22% and 20% growth in deposits and advances in the current year.