UCO Bank Reports Strong Q1 FY27 Performance; Operating Profit Jumps 80%, Asset Quality Improves
UCO Bank has released the transcript of its post-earnings conference call for the quarter ended June 30, 2026 (Q1 FY27), highlighting strong operating performance driven by healthy credit growth, higher net interest income, and a significant improvement in asset quality.
The public sector lender reported an 8% year-on-year (YoY) increase in net profit to ₹656 crore, despite the impact of a one-time deferred tax adjustment. Operating profit surged 79.8% YoY to ₹2,810 crore, supported by strong growth in core banking income and higher fee-based earnings.
Key Financial Highlights (Q1 FY27)
- Net Profit: ₹656 crore, up 8% YoY
- Operating Profit: ₹2,810 crore, up 79.8% YoY
- Net Interest Income (NII): Up 16.85% YoY
- Fee-Based Income: Up 35% YoY
- Recoveries from Written-Off Accounts: ₹1,018 crore
- Total Business: ₹6.05 lakh crore, up 15.53% YoY
- Global Advances: ₹2,72,768 crore, up 21.18% YoY
- Total Deposits: ₹3,32,315 crore, up 11.28% YoY
- CASA Deposits: ₹1,16,136 crore, up 12.34% YoY
- CASA Ratio: 36.94%
One-Time Tax Charge Impacts Net Profit
UCO Bank said its bottom line was affected by a one-time Deferred Tax Asset (DTA) adjustment following its transition to the new corporate tax regime.
As part of the transition, the applicable corporate tax rate was reduced from around 35% to 25%, requiring the bank to revalue its Deferred Tax Assets. This resulted in a one-time charge of ₹1,237 crore during the quarter.
Consequently, the bank’s total tax provision stood at ₹1,919 crore, moderating the growth in reported net profit despite strong operating performance.
Asset Quality Continues to Improve
The bank reported further improvement in its asset quality during the quarter.
- Gross Non-Performing Assets (GNPA): 2.08%, down 55 basis points YoY
- Net Non-Performing Assets (NNPA): 0.25%, down 20 basis points YoY
- Provision Coverage Ratio (PCR): 97.85%
The continued decline in bad loans reflects improved recovery efforts and prudent risk management.
Credit Growth Driven by RAM Segment
Loan growth remained healthy across key segments, with the Retail, Agriculture, and MSME (RAM) portfolio emerging as the primary growth driver.
- RAM Advances: Up 25.27% YoY
- Retail Loans: Up 27.32% YoY
- Agriculture Loans: Up 30% YoY
The strong growth in these segments, along with stable deposit mobilization, helped expand the bank’s overall business to ₹6.05 lakh crore.