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Uco Bank seeks LIC's support for equity expansion

The bank had reported Rs 599 crore loss in the year ago period while the loss for March quarter was Rs 1552 crore.

, ET Bureau|
Updated: Aug 08, 2019, 09.18 PM IST
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Kolkata: State-owned Uco Bank has invited Life Insurance Corporation of India (LIC) to acquire up to 15% stake in it as the bank is looking to pare government holding to below 75% as per market regulation.

The Kolkata-based lender has a fortnight back written to the insurance giant seeking an investment about Rs 1000 equity to this end, Uco chief executive officer AK Goel said.

The government currently holds 92.52% in Uco.

Goel said that the bank would require about Rs 4500-5000 crore capital this fiscal while the bank management is looking to raise it from the government and institutions such as LIC.

"Raising capital from market is not conducive at present," he said. The bank's capital adequacy ratio was at 10.88% at the end of June.

Uco has raised Rs 500 crore tier II bond from LIC in the quarter to June.

The bank has reported Rs 601.45 crore net loss for the June quarter, making it 15th consecutive quarterly loss, despite rise in treasury income and fall in provision against bad loans.

The bank had reported Rs 599 crore loss in the year ago period while the loss for March quarter was Rs 1552 crore.

Uco's operating profit rose marginally at Rs 1201 crore compared with Rs 1182 crore, backed by higher earnings from treasury operation at Rs 875 crore as against 12 crore loss in the year ago period.

The bank's total provision rose to Rs 1803 crore from Rs 1781 crore while provisions against bad loans fell sharply to Rs 1375 crore from Rs 2038 crore with slight improvement in asset quality.

"We are very happy with our results. Our operating profit and net interest income in the last quarter have been the highest in the last 14 quarters," Goel said. He said fresh bad loans at Rs 1433 crore has been the lowest for the same period.

Its gross non-performing assets ratio improved to 24.85% of gross advances at the end of June from 25.72% a year ago. Net NPA ratio was at 8.98% as against 12.74% in the same period.

Uco's share closed the day flat at Rs 16.10 on BSE after the announcement of the financial results while it traded with gains for the rest of the day.

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