UCO Bank Q4 Net Profit Jumps By 475% YoY

In an environment where most of the banks are facing headwinds to grow their profits, Kolkata based midsized public sector bank came out spectacular set of numbers where their profit in Q4FY14 grew by huge 475% on yearly basis. UCO Bank posted net profit of Rs 284.7 crore in Q4FY14 against Rs 49.56 crore for the same quarter last year. The profit of the bank would have been higher by Rs 142.88 crore, had the bank not adopted the Accounting Standard (AS-9).  The growth in net profit was result of better all round performance of the bank.

Net interest income of the bank grew by 15.7% on yearly basis to Rs 1559.9 crore. Other income, which forms a little less than 9% of the total income of the bank, grew by massive 44.8% on yearly basis to Rs 458.92 crore for Q4FY14. In addition to income, bank was able to control its cost in a better way and we saw operating expenses growing by mere 2.1% on yearly basis to Rs 645.6 crore for Q4FY14. All this helped the bank to post 33% growth on yearly basis in the operating profit to Rs 1373.32 crore at the end of Q4FY14.  Provision & contingencies of the bank has dropped by 7.4% on yearly basis to Rs 904.64 crore for Q4FY14.

The other indicators of asset quality too saw a marked improvement both on sequential as well as on yearly basis. Gross non-performing asset (NPA) and net NPA of the bank as proportion to gross and net lending has declined by 88 basis points and 68 basis points to 4.32% and 2.38% respectively for Q4FY14.

Currently the shares of the bank are trading at price to book value of one time and looks undervalued, especially looking after the current performance. The result of the bank came after market hour and hence we can see some up move in the share price of the bank in tomorrow's trade.