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UCO Bank Posts ₹6.07 Billion Profit in Q1 FY26, Asset Quality Improves Amid Strong Interest Income

Updated: July 21, 2025 12:55

Image Source: GoodReturns
UCO Bank has reported a net profit of ₹6.07 billion for the June quarter of FY26, reflecting a stable financial trajectory supported by robust interest earnings and prudent provisioning. The bank’s performance signals continued progress in asset quality and operational efficiency.
 
Key Highlights:
  • Interest earned during the quarter stood at ₹64.36 billion, driven by healthy credit growth and stable cost of funds.
  • Provisions for NPAs amounted to ₹4.63 billion, while total provisions and contingencies reached ₹6.16 billion, indicating conservative risk management.
  • Gross NPA declined to 2.63 percent, showcasing improved asset quality and lower slippages.
Operational Metrics:
  • Net profit rose to ₹6.07 billion, supported by higher net interest margins and disciplined cost control.
  • Provision Coverage Ratio (PCR) remains above 95 percent, reflecting strong buffers against stressed assets.
  • The bank continues to maintain a capital adequacy ratio well above regulatory norms, ensuring resilience against macroeconomic shocks.
Strategic Context:
  • UCO Bank’s sovereign backing and pan-India presence, especially in eastern regions, provide a stable deposit base and access to low-cost funds.
  • The bank is expanding its footprint in co-lending, MSME financing, and digital onboarding, contributing to inclusive growth.
  • Analysts expect further reduction in GNPA and NNPA, supported by improved underwriting and recovery efforts.
Market Outlook:
  • With improving fundamentals and strong provisioning, UCO Bank is positioned as a conservative yet promising PSU banking play.
  • Investors may view the bank as a stable option for long-term exposure to India’s financial sector.
Sources: UCO Bank Investor Presentation, Acuité Ratings, India Infoline, Business Standard, ET Now (July 2025)

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