Uco Bank expects to make profits by FY18

Kolkata, June 29: State-run Uco Bank, which slipped into the red last fiscal on account of high provisions to cover huge surge in bad loans, is expected to return to profitability by the next fiscal, bank's MD and CEO RK Takkar said on Wednesday.

Takkar said the Kolkatabased bank is focussing on “pro-active management of asset health” through close monitoring of loan accounts andgoingallouttorecoverbad loans to bring down non-performing assets (NPAs) level.

In a bid to clean its balance sheets, the lender is also planning to sell 20 loans accounts, with loans worth around R2,000 crore, to asset reconstruction companies (ARCs) in the next few quarters.

Notably, Uco Bank was the worst performer among the public sector banks registering highest increase in NPAs in percentage terms against total loans in the last financial year. As on March 31, 2016, its gross NPA ratio stood at 15.43% with gross NPAs in absolute ter m was at R20,908 crore.

Although the bank registered an operating profit of R3,603.39 crore during the last fiscal, it incurred a net loss of R2,799.25 crore due to a whopping R6,403 crore provisions and contingencies.

Speaking at the company's annual general meeting, Takkar said Uco Bank's employees were hitting the streets and protesting at the residence and workplaces of defaulters to recover bad loans from them.

He said the bank was experiencing 'good recovery' of bad assets in the sectors like MSME, agriculture and small retails, but loan recovery from larger accounts would be the key as mid and large scale industries accounted for over 50% of its loan portfolio.

“SDR (strategic debt restructuring) is not working, but we are open to sustainable restructuring. As the scheme (Scheme for Sustainable Structuring of Stressed Assets) has come out recently, things are being worked out. By next quarter, I think things should start moving,” the CEO told reporters.