U CO BANK = RESULTS = Q4 & FY 2011 = Q4 FY 11 NPT DOWN BY 41% FROM Q4 FY 10 =

UCO Bank

NSE Symbol    UCOBANK

UCO BANK has declared its results for the 4^th qtr ending March,2011, and for FY 2011.

QUARTERLY RESULTS

Interest on Advances for Q4 : is Rs.2297.55 cr – up by 4.27% from Q3; up by 13.62% from Q2; up by 15.9% from Q1 ; and up by 31.19% from Q4 of FY 10.

Income on Investments for Q4 : is Rs.727.57 cr – up by 7.17% from Q3; Up by 10.98% from Q2; Up by 14.03% from Q1; and Up by 19.68% from Q4 of FY 10.

Total Income for Q4 is : Rs.3360.55 cr – up by      8.11% from Q3; Up by 13.36% from Q2; Up by 17.39% from Q1; and up by 24.93% from Q4 of FY 10.

NII for Q4 is : Rs.  844.28 cr – down by 20.51% from Q3; and down by 15.7% from Q2; down by 9.89% from Q1; and UP by 13.49% from Q4 of FY 10.

Total Expenditure ( excl prov    ) is : Rs.2780.66 cr – up by 18.67% from Q3; up by 23.02% from Q2; up by 25.42% from Q1; and up by 30.89% from Q4 of FY 10. The main increase, as in the case of other PSBs, is under employees cost and operating expenses – i.e., under pensionary liabilities. Hopefully, this huge liability will come down sharply from Q1 FY 12 and will reflect much better profitability from Q1. However, U CO Bank has also to pull up its NII from Q1.

Operating Profit for Q4 is Rs.579.89 cr – down by 24.22% from Q3; down by 17.65% from Q2; down by 10.18% from Q1; but up by 2.53% from Q4 FY 10.

Provisions In Q4 has fallen to Rs.340.77 cr – from Rs.455.70 cr in Q3 FY 11 – but is up from Rs. 176.85 cr in Q4 of FY 10.

Profit before tax in Q4 is : Rs.239.12 cr – down by 22.76% from Q3; up by 92.54% from Q2; down by 11.98% from Q1; and down by 38.49% from Q4 FY 10.

Net Profit for Q4 is : Rs.225.90 cr – down by 25.01% from Q4 ; Up by         89.53% from Q3; down by 13.19% from Q1; and down by 40.52% from Q4 of FY 10.

Capital Adequacy Ratio is reasonable at 11.95. But, U CO Bank is issuing preferential shares to Government of India for about Rs.940 cr at a premium of Rs.110.27. This will augment the loanable funds of U Co Bank considerably and enhance its profitability.

% of Gross/Net NPA is quite low at 0.02, reflecting good quality assets.

Return on Assets is at 0.62

Basic EPS for Q4 stands at Rs.3.48; against Rs. 5.48 in Q3; and Rs.6.91 in Q4 of FY 10.

The annual results are tabulated below.

For the year FY 2011 as a whole, the Basic EPS stands at Rs.14.29 – against Rs.17.47 in FY 2010. The lower performance in Q4 is mainly due to the huge one time burden of the pensionary liabilities.

But, our opinion is – from Q1 FY 2012, most of the PSBs will again reflect vastly improved performances – based on 3 factors :-

(i) Continuance of Normal Growth Curve

(2) Absence of the huge one time burden component of  the Pensionary liabilities and

(3) Huge Funds Infusion by GOI at good premium into most of these Banks, which acts as a cheap source of funds to all these banks.

IMPORTANT NOTES TO RESULTS GIVEN BY U CO BANK :

1. In terms of the Revised Accounting Standard (AS) -15 issued by the Institute of Chartered Accountants of India (ICAI) provision has been made for Employee Benefits. An amount of Rs. 88.68 crores (Rs. 88.68 crores) has been charged to Profit & Loss Account towards amortisation of the increase in transitional liability. The un-amortised portion of such liability is Rs. 88.69 crore (Rs. 177.37 crore).
2. As per the guidelines issued by Reserve Bank of India, the additional liability of  Rs. 507.84 crore (Rs. Nil) for reopening of pension option for such of its employees who had not opted for the pension scheme earlier and  the additional fund requirement of Rs. 292.51 crore (Rs. Nil) for enhancement of the limit of gratuity payable pursuant to the amendment of the Payment of Gratuity Act, 1972, i.e. Rs. 800.35 crore (Rs. Nil)  has been amortised over a period of five years from 2010-11. Accordingly, Rs. 160.07 crore (Rs. Nil) has been charged this year to the Profit and Loss Account and the balance amount of Rs. 640.28 crore (Rs. Nil), which does not include any liability relating to the retired / separated/ employees, has been carried forward.
3. Further an amount of Rs. 461.84 crore (Rs. 265.06 crore), which includes full liability for the retired / separated employees towards second option for pension and liability for other employee benefits, has been charged to Profit & Loss Account towards current year’s liability.

4. The Bank has recognized, MAT Credit to the extent of Rs. 286.10 crore (Rs. 160.64 crore) for year ended 31.03.2011 which is treated as an Asset.

5. The provision coverage Ratio of the Bank with reference to Gross NPA position as on 30.09.2010 is 70%.  As per RBI Circular No. DBOD.No.BPBC.87/21.04.048/2010-11 dated 21.04.2011 an amount of Rs. 210.32 Crore has been kept under an account styled as counter cyclical provisioning buffer representing a surplus of provision under PCR vis a vis as required under prudential norms.  The provision coverage as on 31.03.2011 works out to 51.60%.

6. During the year bank allotted 7, 81, 57,479 equity shares of Rs. 10/- each at an issue price of Rs. 120.27 to the Government of India, on preferential basis, with the approval of shareholders on complying with SEBI(Issue of Capital & Disclosure Requirements), 2009. 

ANNOUNCEMENTS TO NSE

30-04-2011          has recommended a dividend @ Rs.2.00 per share.

29-04-2011          the standalone Results for the year ended on 31-MAR-2011 as follows: Interest earned of Rs. 1137080 lacs for the year ending on 31-MAR-2011 against Rs. 952632 lacs for the year ending on 31-MAR-2010. Interest expended of Rs. 752589 lacs for the year ending on 31-MAR-2011 against Rs. 720220 lacs for the year ending on 31-MAR-2010. Net Profit / (Loss) of Rs. 90654 lacs for the year ending on 31-MAR-2011 against Rs. 101218 lacs for the year ending on 31-MAR-2010.

25-03-2011          7,81,57,479 equity shares of Rs. 10/- each at a premium of Rs. 110.27 per share has been allotted to the Government of India on March 25, 2011 on preferential basis on receipt of contribution of Rs. 940 crore from Government of India following the SEBI Issue of Capital and Disclosure Requirements Regulations 2009.

Results Table :

SL	Particulars	Year Ended
No.		31.03.2011	31.03.2010
1	Interest Earned (a)+(b)+(c)+(d)	1137080	952632
	(a) Interest on advances	850539	710685
	(b) Income on investments	270013	218898
	(c) Interest on balances with R.B.I	12424	19887
	(d) Others	4104	3162
2	Other Income	92541	96593
3	Total Income   (1+2)	1229621	1049225
4	Interest Expended	752589	720220
5	Operating Expenses (a) + (b)	207536	158442
	(a) Employees Cost	148012	105762
	(b) Other Operating Expenses	59524	52680
6	Total Expenditure (4+5) (excl. Provisions)	960125	878662
7	Operating Profit	269496	170563
8	Provisions	175040	65647
	...of which provision for NPA	118065	35380
10	Profit before tax (7-8-9)	94456	104916
11	Tax Expenses	3802	3698
14	Net Profit	90654	101218
15	Paid-up Equity	62751.75	54936
16	Reserves	459110	306212
17	Analytical Ratios
	(i) Percentage of shares held by GOI	68.13%	63.59%
	(ii) Capital Adequacy Ratio:  Basel-I	11.95%	11.35%
	Basel-II	13.80%	13.21%
	(iii) Basic and Diluted EPS	14.29	17.47
	(iv) NPA Ratios
	a) Gross NPA	315036	166643
	b) Net NPA	182455	96628
	c) % of Gross NPA	3.13%	1.99%
	d) % of Net NPA	1.84%	1.17%
	e) Return on Assets (Annualised) (%)	0.66%	0.87%

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