UCO BANK 2023-24 Annual Report Analysis

Tue, 28 May

UCO BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

UCO BANK Income Statement Analysis

• Interest income during the year rose 23.8% on a year-on-year (YoY) basis.
• Interest expenses were up by 33.4% YoY during the same period.
• Operating expenses increased by 23.2% YoY during the year.
• The bank's net interest income (NII) increased by 10.3% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 2.9% in FY24 as against 2.9% in FY23.
• Other income increased by 30.2% YoY during the year.
• Net profit for the year declined by 8.5% YoY.
• Net profit margins during the year declined to 7.6% in FY24 from 10.3% in FY23.

UCO BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	176,505	218,543	23.8%
Other Income	Rs m	25,085	32,655	30.2%
Interest Expense	Rs m	103,074	137,536	33.4%
Net Interest Income	Rs m	73,431	81,008	10.3%
Operating Expense	Rs m	55,109	67,901	23.2%
Pre-provision Operating Profit	Rs m	43,407	45,762	5.4%
Provisions & Contingencies	Rs m	24,783	29,225	17.9%
Profit before tax	Rs m	29,051	25,689	-11.6%
Tax	Rs m	10,428	9,151	-12.2%
Profit after tax	Rs m	18,263	16,716	-8.5%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	2.9	2.9
Net profit margin	%	10.3	7.6

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UCO BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 2,631.3 bn as compared to Rs 2,493.4 bn in FY23, thereby witnessing an increase of 5.5%.
• Advances for the year stood at Rs 1,820.2 bn as compared to Rs 1,558.7 bn during FY23, a rise of 16.8%.
• Cost of deposits for UCO BANK rose 19.1% and stood at 4.5%, while yield on advances rose to 7.8%.
• The lender's investments fell to Rs 927.6 bn during the year from Rs 950.1 bn in FY23.
• Borrowing stood at Rs 253.3 bn, a growth of 23.6% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 3,235.5 bn as against Rs 3,007.0 bn during FY23, thereby witnessing a rise of 7.6%.

UCO BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	256,037	272,138	6.3%
Advances	Rs m	1,558,702	1,820,219	16.8%
Deposits	Rs m	2,493,377	2,631,298	5.5%
Yield on advances	%	6.6	7.8
Cost of Deposits	%	3.8	4.5
Investments	Rs m	950,085	927,614	-2.4%
Borrowings	Rs m	205,011	253,314	23.6%
Total Assets	Rs m	3,007,022	3,235,485	7.6%

Current Valuations for UCO BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 1.4, an improvement from the EPS of Rs 1.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 59.7, stands at 33.9 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.6 times, while the price to income ratio stands at 2.6 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	14.8	18.3
Earnings per share (Unadj.)	Rs	1.5	1.4
Diluted earnings per share	Rs	1.5	1.4
Avg P/E ratio	Rs	15.9	33.9
Avg P/ABV ratio	Rs	1.2	2.6
Avg Market Cap	Rs	290,948	567,191
Dividends per share (Unadj.)	Rs	0.00	0.28

Ratio Analysis for UCO BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 69.2x during FY24, from 62.5x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 10.60x during FY24, from 10.54x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): UCO BANK's capital adequacy ratio (CAR) was at 17.0% as on 31 March 2024 as compared to 16.5% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank deteriorated and stood at 6.1% during FY24, from 7.1% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank deteriorated and stood at 0.52% during FY24, from 0.61% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank deteriorated and stood at 9.10% during FY24, from 9.14% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. UCO BANK's gross NPA ratio stood at 3.5% as of 31 March 2024 compared to 4.8% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of UCO BANK was 0.9% in financial year 2024. This compared with 1.3% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	62.5	69.2
Debt to Equity Ratio	x	10.5	10.6
Loans / Deposits	x	0.1	0.1
Capital Adequacy Ratio	%	16.5	17.0
Return on Equity	%	7.1	6.1
Return on Assets	%	0.6	0.5
Return on Capital Employed	%	9.1	9.1
% of Gross NPAs	%	4.8	3.5
% of Net NPAs	%	1.3	0.9
Yield on Advances	x	6.6	7.8
Yield on Investments	x	6.0	6.9

To see how UCO BANK has performed over the last 5 years, please visit here.

UCO BANK Share Price Performance

Over the last one year, UCO BANK share price has moved up from Rs 26.5 to Rs 59.7, registering a gain of Rs 33.3 or around 125.7%.

Meanwhile, the S&P BSE BANKEX is trading at 56,276.3 (up 0.0%). Over the last one year it has moved up from 49,960.5 to 56,276.3, registering a gain of 6,315.8 points (up 12.6%).

Overall, the S&P BSE SENSEX is up 22.1% over the year.

(To know more, you can check out historical annual results for UCO BANK here and quarterly results for UCO BANK here)