Nandini Goswami

Kolkata: Public sector Uco Bank on Monday posted a 177.42% rise in net profit at Rs 86 crore during the fourth quarter of the fiscal ended March 31, 2008.

The bank identified an increase in yield on advances and return on assets, apart from robust recovery, as the main drivers to its profit. For the financial year 2007-08, net profit of the bank increased by 30.38% to Rs 412 crore.

The bank had to provide for Rs 130 crore for depreciation of securities - mark-to-market losses -in the last few days of the fiscal.

The bank achieved a total business of Rs 1.35 lakh crore, up 20.66% from the previous financial year.

Total deposits increased 23.20% to Rs 79,909 crore, while advances grew 17.18% to Rs 55,627 crore.

The bank also said it brought down its level of non-performing assets to 1.98% and return on recovery increased to Rs 102 crore from Rs 60 crore in the previous year.

Meanwhile, the bank is planning to come up with a follow on public offer (FPO) in the third quarter of the current fiscal.

The finance ministry is expected to approve the conversion of Rs 300 crore of equity into preference shares.

“The final nod for the capital conversion should be around the corner,” chairman and managing director S K Goel said here while announcing the annual results.

“Once this comes through, we will be able to bring down our capital from 800 crore at present to Rs 500 crore. Additional capital of Rs 100 crore will be raised through a FPO in the third quarter.”

The bank is also planning to raise Rs 325 crore through perpetual non-cumulative preference shares by June.

“Once the capital restructuring is done, the ratios will become attractive and we should also have adequate headroom for raising Tier II capital as well,” Goel said.

Uco Bank, with a capital adequacy ratio of 10.09%, has made itself Basel -II compliant during the year. As per Basel-II, the capital adequacy was 11.02%. The bank had to add approximately Rs 3,300 crore to its risk weighted assets to take care of operational risk as per requirements under Basel-II.

The bank is looking for a 22% and 20% growth in deposits and advances in the current year.

Source : DNA