This article first appeared on GuruFocus .
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Total Business:INR6,05,000 crores, 15.53% year-on-year growth.
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Advances Growth:21.18%, reaching INR2,72,768 crores.
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Deposit Growth:11.28%, reaching INR3,32,315 crores.
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CASA Growth:12.34%, with total CASA at INR1,16,136 crores.
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CASA Ratio:36.94% as of June 30.
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Retail Advances Growth:27.32%.
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Agriculture Advances Growth:30% year-on-year.
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MSME Advances Growth:18.79% year-on-year.
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Operating Profit:INR2,810 crores, 79.8% growth.
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Net Interest Income (NII) Growth:16.85%.
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Fee-Based Income Growth:35%.
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Net Profit:INR656 crores, 8% year-on-year growth.
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Gross NPA:2.08%, reduced by 55 basis points year-on-year.
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Net NPA:0.25%, reduced by 20 basis points year-on-year.
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Provision Coverage Ratio:97.85%.
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Credit Cost:0.39% annualized for the quarter.
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Slippage Ratio:0.63% annualized for the quarter.
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Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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UCO Bank ( BOM:532505 ) reported a strong year-on-year business growth of 15.53%, with advances growing by 21.18% and deposits by 11.28%.
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The bank's operating profit surged by 79.8% to INR2,810 crores, supported by a 16.85% increase in net interest income and a 35% rise in fee-based income.
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Asset quality improved significantly, with gross NPA reduced by 55 basis points to 2.08% and net NPA down by 20 basis points to 0.25%.
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The bank's CASA ratio stood at a healthy 36.94%, with current deposit growth at 16.23% and savings deposit growth at 11.78%.
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UCO Bank ( BOM:532505 ) has launched several digital initiatives and new products, including Project Parivartan 2.0, STP home loan journey, and UCO Rising Star for children, enhancing customer engagement and service delivery.
Negative Points
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Despite a strong operating profit, net profit growth was limited to 8% year-on-year due to increased tax provisions, including a one-time DTA charge of INR1,237 crores.
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The cost-to-income ratio, although improved to 37.49%, is expected to rise as the recovery from technical written-off accounts normalizes.
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The bank's guidance for credit growth remains conservative at 12% to 14%, despite achieving a 21% growth in the first quarter.
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There is a slight increase in the cost of deposits due to reclassification, which may impact future profitability if not managed.
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The bank faces competition from both public and private sector banks, as well as NBFCs, which could pressure margins and market share.
Q & A Highlights
Q: Can you provide guidance for the year regarding cost of funds, cost of deposit, cost-to-income ratio, and return on equity? A: Rajendra Kumar Saboo, Executive Director: We have seen moderation in our cost of funds, now at 4.36%. We expect deposit costs to stabilize. Our NIM guidance is 2.8% to 2.90%, and we have reached 3.05%. The cost-to-income ratio has improved to 37.49% due to high operating profit, but we expect it to stabilize around 50%. Credit growth guidance is 12% to 14%, with a strong pipeline of INR15,000 crore.
Q: Are you shifting focus from low-yielding government advances to other sectors like RAM or home loans? A: Rajendra Kumar Saboo, Executive Director: Our advances growth is primarily from the RAM sector, with retail growing at 27.3%, agriculture at 30%, and MSME at 19%. We are not involved in IBPC and are focusing on improving yields through diversified sector exposure.
Q: With the investment climate improving in West Bengal, how is UCO Bank positioned to benefit? A: Rajendra Kumar Saboo, Executive Director: UCO Bank, headquartered in Kolkata, has a strong presence in West Bengal with 400 branches. We are engaging with corporates in sectors like steel and infrastructure to capitalize on growth opportunities in the state.
Q: What would have been the ROA if the bank had remained in the old tax regime? A: Rajendra Kumar Saboo, Executive Director: The INR1,237 crores one-time DTA charge impacted our ROA. Without it, our ROA could have exceeded 1%. However, we are now operating under the new tax regime as required.
Q: Where is the competition coming from, and which sectors are showing the most growth? A: Rajendra Kumar Saboo, Executive Director: Competition is from public and private sector banks, NBFCs, and RRBs. Growth is strong in the RAM sector, particularly in home and vehicle loans. We see opportunities in infrastructure, renewable energy, and traditional sectors like steel and cement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
