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Analyst Meet / AGM - Analyst Meet

Targets retail loans growth at 30% for FY2016

UCO Bank

04-Jun-2015, 09:30

UCO Bank conducted an analyst meet on 04 June 2015 to discuss the financial performance for the quarter ended March 2015 and prospects of the Bank. Arun Kaul, CMD of the bank addressed the meet:

Highlights:

The year FY2015 was a year of consolidation for the bank. The deposits of the bank increased 7.4%, while the advances declined marginally by 0.9% in FY2015.

Bank has pursued the conscious strategy of selective growth in the loan book. Bank has stopped lending in the corporate book with clear focus on retail book. The retail loan book of the bank galloped 20% in FY2015.

Bank has targeted 30% retail loans growth for FY2016. Bank would be going after AAA rated accounts, where the yields are lower. However, the bank aims to maintain margins by better liability management.

CASA deposits of the bank stood at Rs 62375 crore, amounting to 32.2% of the domestic deposits.

Treasury profit on sales of investment and foreign exchange gains were strong at Rs 1226.5 crore in FY2015 with robust treasury profit of Rs 459 crore in Q4FY2015. Bank expects healthy treasury profit for FY2016.

The investment book of the bank, which is mostly G-sec SLR, stood at Rs 67385 crore at end March 2015, of which about Rs 24748 crore of 36.7% is in AFS book.

Bank has recorded one of the lowest expense ratio in the banking industry at 37.75% in FY2015. Bank expects to marginal pressure on expense ratio in FY2016 due to wage revision and fresh recruitments of FY2015.

Fresh slippages of advances were elevated at Rs 2074 crore in Q4FY2015. The fresh NPA additions were Rs 7551 crore in FY2015, of which slippages from restructured loans to the NPA category were Rs 2559 Crore.

Fresh restructuring of advances stood at Rs 2334 crore in Q4FY2015. The standard restructured advance book of the bank stood at Rs 10796 crore at end March 2015.

Bank sees worst to be over in terms of asset quality. Bank expects a healthy pick up in asset quality resolution in FY2016, helping to improve asset quality.

Bank does not have any restructuring pipeline.

As per the bank, the inflows in the current account deposits of the bank from Iran trade related account declined due to fall in crude oil import from Iran and dip in crude oil prices. However, the bank expects these inflows to be stable at Rs 15000-17000 crore.

Bank does not require any capital infusion for FY2016.

Bank has network of 3020 branches and 2096 ATMs at end March 2015.