UCO Bank Ltd came out with satisfactory set of numbers for the Q3FY15. The net profit fell marginally by 3.5% to Rs.303.59 crore in the third quarter of 2014-15 financial year. The bank had registered a net profit of Rs.314.53 crore in the same quarter of 2013-14.
We can understand the September, 2014 quarter performance of the UCO Bank Ltd a little better, if we compare the sequential figures. The total income of the bank came at Rs.5447.39 Cr in Q3FY15 as against Rs.5256.62 Cr in Q2FY15. The PBDT increased to whooping Rs.1425.14 Cr as against Rs.1055.77 Cr Q2FY15. The net profit of the company almost TRIPLED to Rs.303.60 Cr as against Rs.103.54 Cr. The EPS of the company for Q3FY15 came out to be Rs.2.99 as against Rs.1.02 Cr in Q2FY15. Even the 9MEPS, for the UCO Bank is a massive Rs.9.15.
The scrip should be crossing Rs.100, within a couple of months, as the RBI further lowers the Repo rate or cuts the CRR. Therefore this is a turnaround case, which most in the Indian Financial Media, failed to identify.
Besides, there were recent media report that the Government is likely to infuse Rs.6,990 crore in nine public sector banks including SBI, Bank of Baroda (BoB), Punjab National Bank (PNB) for enhancing their capital and meeting global risk norms. This news augurs well for the whole of PSU banking sector.
Also, according to The Economic Times, January 16. 2015: State-run banks are going to benefit the most from the Reserve Bank of India's cut in interest rates by 25 basis points, as it would help them use the treasury gains to negate provision and write-offs of bad loans. The treasury gains of public sector banks alone are expected to be over Rs.2,000 crore as the value of their holdings in government bonds is likely to surge this quarter. A reduction in rate may also bring down the burden for debt-laden corporates, triggering a better investment climate.