UCO Bank is aiming to improve asset quality and maintain margins in the current year, managing director and CEO Ashwani Kumar tells Piyush Shukla.
UCO Bank is aiming to improve asset quality and maintain margins in the current year, managing director and CEO Ashwani Kumar tells Piyush Shukla. Edited excerpts:
What is the guidance on GNPA, NNPA for FY25?
We intend to lower the gross NPA (non-performing asset) ratio from 3.46% in March 2024 to 2.75% over a year and the net NPA from 0.89% to about 0.6%. All big-ticket recoveries have mostly happened. Now, maybe a few Rs 100 crore-Rs 200 crore of accounts are left. For FY25, we will try to achieve recovery and upgrade of about Rs 3,000 crore.
The bank recovered nearly Rs 730 crore after the IMPS glitch. When do you expect the full recovery of Rs 820 crore?
I think it will take a little longer. There can be certain accounts which may not turn up, so we have already provided Rs 92 crore for the remaining recovery amount. The good part is we have strengthened our systems and all control mechanisms have been put in place.
Deposits grew by 5% in Q4FY24. What is the outlook for FY25?
We will open 130 new branches in FY25 and are focusing on generating good quality CASA (current account, savings account) by introducing tab banking, which results in higher balances. Now 1,600 branches have been given the tab banking facility and we are building teams at the zonal offices.I think 8-10% of deposit growth can support the 13-14% advances growth target. If needed, we will hike deposit rates but we are not chasing bulk deposits. We did not raise deposit rates in Q4FY24. We are also using excess statutory liquidity ratio securities to raise funds.
What is the outlook on margins and the loan mix?
Our domestic net interest margin (NIM) stood at 3.24% in Q4FY24 and global NIM at 3.03%. We hope to maintain this at 2.9-3% NIM in FY25. Currently, our retail, agriculture and micro, small and medium enterprises (RAM) and corporate loan mix is hovering around 60:40. We will maintain the mix.
You mentioned investing Rs 1,000 crore in IT infra in FY25.
We don’t have many products on our digital platform. We are launching a virtualisation server, newer treasury solutions and we are also integrating all our transaction monitoring verticals. Further, we will replace our old infrastructure and are also engaging in a network operation centre project. Some the cybersecurity solutions will be on-boarded this year. Enterprise data warehousing project is in phase-1 and once it is competed we will go for phase-2.
Source:financialexpress.com