The public sector lender, UCO Bank has posted a dip in net profit by 69 per cent to Rs 102 crore for the third quarter of the current financial year due to increase in provisioning by more than 70 per cent.
The provisioning for non-performing assets and other employee liabilities also increased to Rs 728 crore against Rs 420 crore in the corresponding quarter of the previous year.
According to Mr. S Chandrasekharan, Executive Director, UCO Bank has set aside Rs 417 crore as provisioning towards NPA (non-performing assets) during the quarter under review.
Gross NPAs grew to 5.53 per cent against 3.49 per cent for the year ago period, while net NPAs also increased to 3. 32 per cent against 2.04 per cent.
UCO bank witnessed slippages amounting to Rs 1,200 crore during the quarter primarily driven by smaller accounts, Mr. Chandrasekharan said. The rise in bad loans has dragged down the net interest margin (NIM) to 2.3 per cent against 2.89 per cent for the corresponding quarter of previous year.
"Moving forward margins will improve as we expect fresh slippages to come down and recovery from bad assets to boost our bottom-line," Mr. Chandrasekharan said.
The bank targets to achieve NIM of close to three per cent by the end of this financial year.