UCO Bank to focus on retail and small entrepreneurs

UCO Bank to focus on retail and small entrepreneurs State-run lender UCO Bank has announced that it would slash the size of its corporate portfolio so that it could put more focus on retail and small entrepreneurs.

Arun Kaul, chairman & managing director of UCO Bank, said corporate business hurts the bank more whenever economy suffers slowdown in growth.

In the September quarter, UCO Bank slashed its corporate business by 5 per cent and increased its retail business by 19 per cent in a bid to enhance its balance sheet. As on September 30, the bank’s corporate assets slipped to Rs 88,217 crore, while its retail assets increased to Rs 33,622 crore.

Speaking on the topic, Mr. Kaul said, “We are in a transition from corporate to retail focus."

UCO Bank suffered a decline of 55 per cent in net profit to Rs 104 crore for the three months to September 30 this year. The decline was primarily due to higher provisioning for NPAs (non-performing assets). The bank set aside Rs 435 crore as provisioning towards NPAs in the quarter, as compared with Rs 244 crore in the corresponding period previous year.

Net NPAs jumped from 2.11 per cent to 2.94 per cent in the quarter under review, while proportion of gross NPA to advances jumped from 3.64 per cent to 4.88 per cent.

The increase in bad assets affected UCO Bank’s profitability, pulling its net interest margin down from 2.84 per cent to 2.24 per cent.

UCO Bank has requested the Union Government to provide it with Rs 1,500 crore to fund its growth needs.