UCO Bank Q4 FY26: Net Profit Rises 22% YoY to Rs 801 Crore, Credit Grows 19.44%
UCO Bank reported strong Q4 FY26 results with net profit rising 22% YoY to Rs 801 crore and full-year profit growing 13.21% to Rs 2,768 crore. Credit growth of 19.44% YoY exceeded guidance, gross NPA improved to 2.17%, and the bank holds approximately Rs 1,900 crore in additional provisioning buffers. Digital business under Project Parivartan crossed Rs 25,000 crore, with FY27 guidance set at 12–14% credit growth and gross NPA target below 2%.
*this image is generated using AI for illustrative purposes only.
UCO Bank has submitted the transcript of its Post Earnings Call with analysts to the National Stock Exchange and BSE Limited, in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The earnings call, held on April 27, 2026, was moderated by Antique Stock Broking Limited and featured MD & CEO Mr. Ashwani Kumar, along with Executive Directors Mr. Rajendra Kumar Saboo and Mr. Vijay N Kamble. The bank reported robust performance across all key parameters for Q4 FY26 and the full financial year 2025–26, with net profit for the quarter rising 22% on a year-on-year basis to Rs 801 crore and full-year profit growing 13.21% YoY to Rs 2,768 crore.
Financial Performance Highlights
MD & CEO Ashwani Kumar presented comprehensive performance metrics during the call, highlighting strong growth across business, credit, and deposit parameters. Business grew 14.95% on a YoY basis, while gross advances grew 19.44% YoY and deposits grew 11.59% YoY. Within deposits, CASA growth was around 12.46%, savings grew 11.78%, and current accounts registered a growth of 16.77%. The full-year operating profit stood at Rs 6,429 crore, reflecting a growth of 6.49%. Fee-based income grew 32% YoY to Rs 516 crore against Rs 389 crore in the previous year. The cost-to-income ratio improved by 581 basis points over the previous year to 52.66%, and the capital adequacy ratio improved to 18.61%, with Tier-1 capital at 16.59%. The Board approved a dividend of 44 paisa per equity share (4.40%), subject to shareholder approval, representing a payout of approximately 20%.
The following table summarises the bank's guidance versus actual achievement for the year:
| Performance Metric: | Guidance | Achievement |
|---|---|---|
| Credit Growth: | 12–15% | 19.44% |
| Deposit Growth: | 10–12% | 11.59% |
| CASA Ratio: | 37–38% | 38.65% |
| RAM Percentage: | 61–63% | 65% |
| CD Ratio: | 75–77% | 80.21% |
| Credit Cost: | <1% | 0.62% |
| NIM (Global): | 2.8–2.9% | 3.03% |
| NIM (Domestic): | 2.8–2.9% | 3.23% |
| Gross NPA: | <2.5% | 2.17% |
| Net NPA: | <0.35% | 0.27% |
| Slippage Ratio: | 1–1.25% | 0.78% |
| Recovery & Upgradation: | Rs 2,200–2,700 crore | Rs 2,944 crore |
Asset Quality and Provisioning
The bank demonstrated significant improvement in asset quality. Gross NPA improved to 2.17%, a reduction of 52 basis points over the previous year, while Net NPA was brought down to 0.27%, marking a 23 basis points improvement. The Provision Coverage Ratio (PCR) improved to 97.79%, a 110 basis points enhancement over the previous year. Excluding technically written-off accounts, PCR improved to 87.66%, a 571 basis points improvement.
| Asset Quality Metric: | Current | Improvement |
|---|---|---|
| Gross NPA: | 2.17% | -52 bps YoY |
| Net NPA: | 0.27% | -23 bps YoY |
| PCR (Overall): | 97.79% | +110 bps YoY |
| PCR (Excl. TWO): | 87.66% | +571 bps YoY |
On provisioning buffers, management disclosed that ECL provisions held as of the current quarter stand at Rs 1,038 crore, up from Rs 720 crore in the previous quarter. An additional contingency provision of Rs 341 crore has also been made. Including a Covid-19 provision of Rs 530 crore made during the pandemic, the total additional provision buffer amounts to approximately Rs 1,900 crore. The AFS reserves as on March 2026 stood at negative Rs 140 crore, reflecting the impact of yield movements on the mark-to-market book.
FY27 Guidance
Management provided guidance for the current financial year, maintaining conservative targets while expressing confidence in surpassing them based on historical performance trends. Credit growth guidance for FY27 has been set at 12–14%, with deposit growth at 10–12%. The RAM percentage guidance has been improved to 62–65%.
| Parameter: | FY27 Guidance | FY26 Achievement |
|---|---|---|
| Deposit Growth: | 10–12% | 11.59% |
| Credit Growth: | 12–14% | 19.44% |
| CASA Ratio: | 37–38% | 38.65% |
| RAM Percentage: | 62–65% | 65% |
| CD Ratio: | 80–82% | 80.21% |
| Credit Cost: | <0.75% | 0.62% |
| NIM (Global): | 2.8–2.9% | 3.03% |
| Gross NPA: | <2% | 2.17% |
| Net NPA: | <0.2% | 0.27% |
| Slippage Ratio: | <1% | 0.78% |
| Recovery & Upgradation: | Rs 2,000–2,500 crore | Rs 2,944 crore |
Digital Transformation and Technology Initiatives
A significant portion of the discussion focused on the bank's digital transformation journey under Project Parivartan, launched on January 6, 2025. Management highlighted that 31 digital journeys have been completed across Retail, MSME, Agri, and liability products, with total digital business crossing Rs 25,000 crore — comprising Rs 11,000 crore in advances and Rs 14,000 crore in liabilities. Mobile banking users increased from 82 lakhs to 153 lakhs over three years, while active mobile users grew from 14 lakhs to 70 lakhs, improving the active-to-registered user ratio from 17% to 46%. More than 2,50,000 customers were sanctioned loans digitally during the financial year. Over 10 lakh accounts were opened through tab banking, accounting for 66% of all new accounts (excluding BSBD and PMJY accounts). WhatsApp banking has onboarded more than 20 lakh customers, offering 49 services in 14 languages. The mobile app carries a rating of 4.7 to 4.8 on Android app stores and 4.6 on the Apple Store.
The bank's IT spend has grown consistently, as detailed below:
| Financial Year: | IT Spend |
|---|---|
| 2023–24: | Rs 576 crore |
| 2024–25: | Rs 642 crore |
| 2025–26: | Rs 899 crore |
The Board has approved an IT budget of more than Rs 1,000 crore for the current financial year. Planned digital initiatives for FY27 include omnichannel banking, cash management services, supply chain finance, robotic process automation, forex and prepaid card solutions, a document management system, and cybersecurity enhancements including identity access management and a centralized log management system.
Portfolio Composition and Key Business Metrics
Within advances, the RAM segment grew by over 24% YoY, with Retail advances growing over 26%, Agriculture advances growing 26%, and MSME advances growing 19%. Housing loans grew approximately 19% and car loans grew approximately 71%. The gold loan portfolio in the Retail segment stands at approximately Rs 5,400 crore and in Agri at approximately Rs 12,200 crore, bringing the total gold loan portfolio to approximately Rs 18,000 crore. More than 65% of the loan portfolio is linked to the Repo rate. Approximately 40% of advances are covered under CGTMSE. Business per employee improved to Rs 28 crore from Rs 24 crore a year ago, and business per branch improved to Rs 173 crore from Rs 155 crore. The bank operates 3,412 domestic branches — 61% in rural and semi-urban areas — along with 2 overseas branches in Hong Kong and Singapore, and 1 representative office in Iran. A total of 110 new branches were opened during the financial year.
Analyst Interactions and Management Commentary
During the Q&A session, analysts including Ashok Ajmera from Ajcon Global raised questions on guidance conservatism, geopolitical risks, provisioning buffers, and the QIP timeline. Management clarified that the guidance range of 12–14% for credit growth has been consistent over the past three years, and actual achievements have consistently exceeded guidance — with credit growth of approximately 16% in FY24, approximately 17.72% in FY25, and 19.44% in FY26. On the QIP, management confirmed there are no immediate plans for the current quarter and that shareholder approval will be sought at the AGM before proceeding at an opportune time. On the corporate pipeline, management noted approximately Rs 14,000 crore in the pipeline, with disbursements being selectively pursued to protect margins. Growth opportunities were identified in renewables, data centers, smart metering, and road projects. On treasury performance, management noted that the Treasury recorded a loss of Rs 16 crore in the quarter due to an MTM impact of Rs 135 crore on the AFS book from yield movements, compared to a profit of approximately Rs 130 crore in the previous quarter. The bank's ROA stood at 0.87% and management expressed confidence in approaching 0.95–1% ROA levels by the end of the next financial year.
Historical Stock Returns for UCO Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.32% | -2.79% | -7.13% | -19.41% | -20.19% | +94.80% |
Given UCO Bank's consistent pattern of exceeding credit growth guidance by 5-7 percentage points over the past three years, what structural factors could either sustain or disrupt this outperformance trend in FY27?
With more than 65% of UCO Bank's loan portfolio linked to the Repo rate, how vulnerable is the bank's NIM to potential RBI rate cuts in FY27, and can fee-based income growth offset any compression?
As UCO Bank plans to cross Rs 1,000 crore in IT spending for FY27 under Project Parivartan, how does its digital lending scale of Rs 11,000 crore in advances compare to peers, and what monetization milestones should investors watch?
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