PRESS RELEASES 2005

UCO Bank Records 31% Growth in Business - Results for 9 month ended Dec 31, 2005

UCO Bank has recorded a year-on-year growth of 31% in its total business and achieved a total business level of Rs.88,304 crore as on 31.12.2005. While deposits have increased from Rs.43,341 crores to Rs.52,902 crores (increase of 22.06% year-on-year), the growth in advances has been 46.91% y-o-y from Rs.24,098 crores to Rs.35,402 crores. The corresponding rates of growth last year were 29.71% and 33.26% respectively.

As a result of this sharp rise in business, UCO Bank’s domestic market share too has correspondingly improved. In aggregate Deposit, its domestic market share is now 2.44%, having gone up from 2.37% as on December 2004. In net Bank Credit, its current market share has witnessed a rise from 2.18% (December 2004) to 2.42%. There has also been a 33% increase in the Bank’s business-per-employee during the period. The staff cost has declined to 1.46% of Average Working Fund (as against 1.82% in March 2005), despite huge arrear payments made to the staff in the wake of recent salary revision.

During the nine-month period ended December 2005, there has been a rise of 15.22% in Total Revenue compared to the corresponding period of last year. Total Income has increased to Rs.3,489 crores as against Rs.3,028 crores during the period under comparison. Both its Net Interest Income as well as Other Operating Income (except Treasury profit) have recorded significant rise as at the end of December 2005. For the nine months period ended 31st Dec 2005, the Bank has posted an Operating Profit of Rs.527 crores and a Net Profit of Rs.255 crores. The operating profit for the nine months period however declined by Rs.125 crores (i.e. by 19%) compared to the December 2004 position. Correspondingly, the net profit for the nine months ended 31st Dec. 2005 at Rs. 255 crores was lower than the net profit of the corresponding period of last year at Rs.338 crores. The reasons behind this are as under :

• There has been a sharp decline of Rs.115 crore in Treasury Profit during the nine-month period of the current year compared to that in the previous year. Whereas the treasury profit was Rs.176 crores in December 2004, it is only Rs.61 crores in December 2005.

• Provision against Standard Assets having gone up to 0.40% as against 0.25% earlier as per regulatory requirement, an additional provision to the tune of Rs.45 crore had to be made during the current year.

• Further, the Bank had to make additional provision of Rs.44.10 crores towards depreciation and amortization expenses in respect of securities transferred from Available-for-Sale category to Held-to-Maturity category as compared to last year.

The nine months ended 31.12.2005 also witnessed a much improved NPA Recovery performance. The total recovery of Rs.313 crores is better than Rs.220 crores recorded in December 2004. This has also contributed to a significant reduction in the over-all NPA percentage. As on 31st December 2005, Gross NPA Ratio and the Net NPA Ratio came down to 3.69% and 2.32% from 5.25% and 2.98%, respectively as on 31st December 2004.

UCO Bank has focused its attention to increasing its Retail business in a big way. Toward this end, it is in the process of launching a Retail Sales Force by mid-February 2006 at four identified cities across the country on a pilot basis for marketing its Deposit and Retail loan products. It has recently entered into tie-up arrangements with Prudential ICICI and Franklin Templeton for selling their Mutual Fund products. This is besides similar tie-up already existing with UTI Mutual Fund and Reliance Mutual Fund.

As part of its technology initiatives, the “Anywhere-Branch-Banking” (ABB) project is going to be operational by the end of this month, covering 102 networked branches connected through a Virtual Private Network (VPN). The number of branches under ABB is to reach 250 by March 2006. Another important initiative has been the signing of tie-up arrangement with HP for implementing the Bank’s Core Banking Solution (CBS) project. CBS will be implemented at 1000 branches across the country covering 90% of the Bank’s business. First few pilot branches are expected to be functional by June 2006.

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