29^th January, 2007

The Balance Sheet of the Bank for the quarter ended 31st December 2006 was signed on 29-01-2007 in the Board Meeting held at Kolkata. We give below the highlights of financial results of the Bank for the nine months period ended 31st December, 2006 alongwith the results of the third quarter ended 31st December 2006 and also the major initiatives taken by the Bank in the third quarter of the current fiscal 2006-07.

Business

In the third quarter of the current fiscal 2006-07, the Bank achieved a major landmark of reaching Rs. one lakh crore of business. As at the end of December, 2006 total business level of the Bank stood at Rs.1,01,167 crore as against Rs. 89,253 crore as on 31st December 2005 recording a year-on-year growth of 13.35%.

Total Deposits

Total Deposits of the Bank increased from Rs. 53,851 crore as on 31.12.2005 to Rs. 58,232 crore as at the end of 31.12.2006 registering a growth of 8.14% year-on-year.

Total Advances

The growth rate in Total Advances was at 21.28%. Advances increased from Rs. 35,402 crore as on 31.12.2005 to Rs. 42,935 crore as on 31.12.2006.

Operating Profit

The Operating Profit of the Bank for the nine months period increased from Rs. 594.22 crore as at the end of 31.12.2005 to Rs. 712.91 crore as at the end of 31.12.2006 thereby showing an increase of 19.97%. The Operating Profit for the third quarter ended December 2006 has recorded an increase of 15.55% to Rs. 258.54 crore from Rs. 223.75 crore in the corresponding previous period.

Net Profit

Net profit of the Bank for the nine months period ended increased by 11.66% to Rs. 285.16 crore as on 31.12.2006 from Rs. 255.39 crore as on 31.12.2005. In the third quarter of the current fiscal, the Net Profit of the Bank stood at Rs.122.95 crore in comparison to Rs.112.51 crore in the corresponding quarter of the previous year thereby showing an increase of 9.28%.

Total Income

Total income recorded a year-on-year growth of 21.08% during the nine months period ended December 2006 from 3489.77 crore as on 31.12.2005 to Rs. 4225.23 crore as on 31.12.2006. The total Income for the third quarter of the current fiscal stood at Rs. 1479.14 crore in comparison to Rs. 1241.32 crore of the third quarter ended December 2005 thereby showing an increase of 19.16%.

Interest Income

The Bank's interest income posted a Y-O-Y growth of 21.41% to Rs. 3865.80 crore during the nine months period ended December, 2006 from Rs. 3184.01 crore for the same period ended December, 2005. In the third quarter of the current fiscal the Interest income rose by 17.78% from Rs. 1137.00 crore as on 31.12.2005 to Rs. 1339.17 crore as on 31.12.2006.

Income on advances registered an increase of 34.29% during the nine months period from Rs. 1900.12 crore as on 31.12.2005 to Rs. 2551.60 crore as on 31.12.2006. In the third quarter of the current fiscal the Interest Income rose by 31.88% from Rs. 688.24 crore as on 31.12.2005 to Rs. 907.66 crore as on 31.12.2006.

Non Interest Income

Non Interest Income (net of treasury income) on Y-o-Y basis increased by Rs. 79.15 crore, the growth rate being 32.32%.

In the third quarter of the current fiscal, Non-Interest Income (net of Treasury Income) showed a growth of 24.92% in comparison to corresponding quarter of the last fiscal.

Priority Sector Advances

Advances to Priority Sector reached a level of Rs. 16,145 crore as on 31.12.2006 as against Rs. 14,231 crore as on 31.03.2006 thereby registering an annualized growth of 17.93%. The percentage of Priority Sector Advances to Net Bank Credit stood at 40.64% as on 31.12.2006.

Advances to Agriculture sector rose to Rs. 5,546 crore as on 31.12.2006 from Rs. 4,922 crore as on 31.03.2006 thereby registering an annualised growth of 16.90%.

Retail Credit

The Advances under Retail sector during the nine months period increased by Rs. 1544 crore at a growth rate of 30.41%. It is expected that the growth under Retail sector will touch around 35% by March 2007.

NPA Management

The Gross NPAs and Net NPAs stood at Rs. 1386.37 crore and Rs. 913.66 crore as of the end of December 2006 respectively. The Gross NPA Ratio declined to 3.23% as on 31.12.2006 as against 3.69% as on 31.12.2005. The Net NPA Ratio has also come down to 2.15% as on 31.12.2006 from 2.33% a year ago.

NPA Recovery at the end of December, 2006 stood at Rs. 279.28 crore. Recovery in written-off accounts has showed a higher performance at Rs. 44.71 crore as of December, 2006 in comparison to Rs. 23.77 crore as of December, 2005.

Capital Adequacy Ratio

The Capital Adequacy Ratio improved to 12.65% compared to 10.23% a year ago and is well above the minimum required level of 9%.

Business Per Employee

The Business Per Employee of the Bank improved to Rs. 4.05 crore as at the end of December 2006 from Rs. 3.68 crore as at the end of December, 2005.

Earning Per Share

The Earning Per Share improved to Rs. 4.76 (Annualised ) as at the end of December, 2006 from Rs. 4.25 ( Annualised ) as at the end of December, 2005.

Major initiatives taken by the Bank

During the third quarter of the current financial year, the Bank has taken several new initiatives - technology as well as other business initiatives which are as under :

Technological Initiatives

1. Core Banking Solution which was launched by the bank during the first quarter of the current financial year 2006-07. Presently, the number of branches under CBS stood at 107 and number of Extension counters under CBS at 7. Around 200 branches are likely to be under CBS by 31.3.2007.

2. Internet banking launched at all CBS branches.

3. UCO International Debit Card introduced in tie-up with VISA international. Our card enables holders access through 1 million VISA enabled ATMs and 21 million merchant establishments all over the globe.

4. 105 branches are RTGS enabled. The number will be further increased to 300 by March 2007.

5. Anywhere Branch Banking and multicity cheque facilities are available at 225 branches.

6. Tierised SB/Current Account schemes launched through all CBS branches and select fully computerized branches.

7. No. of ATMs as on 31.12.2006 are 149 and this number of ATMs will touch 375 by 31.03.2007.

Priority Sector Initiatives

Three new Priority Sector products launched by the Bank viz.

• UCO Shilpa Udyog Scheme.
• UCO Viswakarma Scheme
• Scheme for financing Joint-liability Groups of tenant farmers.

Retail Sales Force Initiatives

Retail Sales Force Teams are functioning in 36 centres across the country and by February 2007 they will be functioning at 44 centres. Business captured by Retail Sales Force has crossed Rs. 553 crores. Chennai and Bangalore Sales Force teams each have already achieved Rs.100 crores of Business.

Small Enterprise Sales force Initiatives

43 cities identified for an aggressive SE push with a dedicated Small Enterprise sales force. SE sales force teams presently operating at 27 centres. SE Sales force teams generated a business of Rs. 206 crore.

Para Banking Initiatives

Under Bancassurance tie-up with LIC, UCO continues to remain first amongst 28 Banking channel partners. In General Insurance business as well, we are maintaining number one position in tie up with National Insurance Company Ltd. UCO is first amongst all the Banking channel partners In tie-up with Western Union and has won a prize money of USD 1 lakh for sending 117 persons abroad and 1200 persons getting gift-vouchers of Rs. 1000/- each.

HR Initiatives

• Infusion of New Blood. 1000 officers and 1000 clerks to be recruited in a year.
• Reskilling of Existing Manpower is in process. 5 more training channels being added this year.

Representative Office in China

Permission to open a representative office in Guangzhou in China has been received on 22.01.2007 from China Banking Regulatory Commission. It is expected that representative office at Guangzhou will be opened by end of February, 2007.

Branch Network

Around 50 branches will be added to UCO branch network this year in addition to 37 Extension Counters upgraded as full-fledged branches.

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