UCO Bank reported a net profit of ₹656 crore for the quarter ended June 30, 2026 (Q1FY27), an 8% decline year-on-year, primarily due to a one-time Deferred Tax Asset (DTA) charge of ₹1,237 crore arising from the transition to the new tax regime. Despite the bottom-line impact, the bank’s operating profit surged 79.8% to ₹2,810 crore, supported by robust credit growth of 21.18% and a recovery of ₹1,018 crore from Technical Written Off (TWO) accounts. The bank maintained its asset quality with Gross NPA reducing by 55 basis points to 2.08%.

The significant dip in net profit was driven by regulatory compliance with the new tax regime, which lowered the corporate tax rate from approximately 35% to 25%. This necessitated a remeasurement of DTAs, resulting in the ₹1,237 crore non-recurring charge. Excluding this impact, the regular tax provision stood at ₹625 crore. Management highlighted that core profitability remains strong, with Net Interest Income (NII) growing by 16.85% and fee-based income rising by 35%. The cost-to-income ratio improved dramatically to 37.49% from 54.06% in the previous year, though management cautioned that this figure is inflated by the non-recurring TWO recovery and expects it to normalize below 50% for the full year.

Business Growth and Asset Quality

UCO Bank’s total business reached ₹6,05,000 crore as of June 30, 2026, reflecting a 15.53% year-on-year expansion. Advances grew by 21.18% to ₹2,72,768 crore, outpacing the bank’s initial guidance of 12-14%. The Retail, Agriculture, and MSME (RAM) segment contributed significantly, with RAM advances constituting 64.5% of the total book. Within RAM, retail loans grew by 27.32%, agriculture advances by 30%, and MSME loans by 18.79%. Deposits grew by 11.28% to ₹3,32,315 crore, aided by a CASA ratio of 36.94%, which remained within the guided range.

Asset quality metrics showed consistent improvement. Gross NPA declined by 55 basis points year-on-year to 2.08%, while Net NPA reduced by 20 basis points to 0.25%. The Provision Coverage Ratio (PCR) stood at 97.85%. Slippages were contained at an annualized rate of 0.63%, well below the 1% guidance. The Standardized Monitoring Approach (SMA) book of ₹1,009 crore represented just 0.36% of total advances, down from 0.43% in March 2026.

Strategic Initiatives and Forward Outlook

Management emphasized digital transformation through "Project Parivartan 2.0," aiming to convert the call center into a profit center. The bank launched several new products, including UCO Rising Star for children, UCO Gig Scheme for gig workers, and a 3-in-1 investment product in collaboration with Aditya Birla Money. Digital business balance sheet grew to ₹35,000 crore from ₹25,000 crore in March 2026, with 70% of fixed deposits now being made via digital channels.

Looking ahead, UCO Bank expects its Net Interest Margin (NIM) to remain above the guided range of 2.8-2.9%, currently standing at 3.05% due to lower cost of funds at 4.36%. Return on Assets (ROA) is projected to approach 1% by year-end, up from 0.68% annualized in Q1, as the one-time DTA charge is cleared and credit costs remain controlled at 0.39% against a guidance of below 0.75%. The bank also plans to open a branch in GIFT City next month and has sanctioned ₹2,150 crore under the Emergency Credit Line Guarantee Scheme (ECLGS), with ₹1,700 crore disbursed so far.

UCO Bank reported a net profit of ₹656 crore for the quarter ended June 30, 2026, registering an increase of 8.05% from ₹607 crore in the corresponding period of the previous year. The bank's operating profit surged 79.84% year-on-year to ₹2,810 crore, driven by robust growth in interest income and fee-based income. Total business stood at ₹6,05,083 crore, growing 15.53% YoY, with gross advances rising 21.18% to ₹2,72,768 crore and total deposits increasing 11.28% to ₹3,32,315 crore. The Board of Directors approved the unaudited financial results for Q1FY27 at its meeting held on July 22, 2026.

The bank's Net Interest Margin (NIM)-Global stood at 3.05%, while Domestic NIM was reported at 3.24%. The Capital Adequacy Ratio (CRAR) under Basel-III norms stood at 19.03%, with the Tier I Capital Ratio at 17.44%. The Provision Coverage Ratio was 97.85%, and the Credit-Deposit ratio improved to 82.08% from 75.38% in the previous year.

Financial Performance

The bank's total income for the quarter rose to ₹8,682 crore from ₹7,433 crore in the year-ago period, reflecting broad-based growth across interest and non-interest income streams. Interest earned stood at ₹6,996 crore compared to ₹6,436 crore, while other income jumped to ₹1,686 crore from ₹997 crore. The following table summarises the key financial figures:

Asset Quality

Asset quality showed improvement on both a year-on-year and sequential basis. The Gross Non-Performing Assets (NPA) ratio declined to 2.08% from 2.63% on a YoY basis and from 2.17% on a QoQ basis. The Net NPA ratio improved to 0.25% from 0.45% YoY and from 0.27% QoQ, reflecting continued progress in credit quality management.

Operational Metrics

The bank disclosed key operational parameters for the quarter ended June 2026 against its guidance for FY 26-27. Credit growth (Y-O-Y) was reported at 21.18% against a guidance of 12-14%, while deposit growth stood at 11.28% within the 10-12% guidance. The Current Account Savings Account (CASA) ratio was 36.94% against a guidance of 37-38%. The NIM Global at 3.05% surpassed the guidance of 2.8-2.9%.