UCO Bank sells Rs1,500-cr of bad assets to ARCs in Q4
21 March 2014
UCO Bank has sold bad loans worth Rs1,500 crore to asset reconstruction companies (ARCs), extending the sale of bad assets to the second straight quarter from the third quarter of the current financial year.
This takes Kolkata-based UCO Bank's sale of NPAs during the year to Rs1,822 crore, according to Arun Kaul, chairman and managing director of UCO Bank.
While this is the second straight quarter when the bank has resorted to selling bad assets to ARCs, the quantum of sale in the fourth quarter have risen nearly five-folds compared to the Rs330 croe bad loans sold in the third quarter.
State-run banks led by the country's largest lender, the State Bank of India (SBI), are rushing to sell off bad loans to protect themselves against the higher loan loss provision rule that take effect in March 2015.
Kaul, however, did not specify the amount that UCO Bank has earned from the sale of its bad assets.
''We have sold bad assets worth ?1,500 crore. However, I cannot comment on what we have earned until the accounts have closed,'' he told reporters during a media interaction at the MCC Chamber of Commerce and Industry.
UCO Bank had sold stressed assets to the tune of Rs322 crore in the quarter ended December 2013. It had also made a Rs812 crore provision against bad debts and non-performing assets during the quarter.
The bank reported a Rs597-crore addition to the stressed asset pile during the quarter.
UCO Bank did not sell bad assets during the first two quarters (April-June and July-September) of the 2013-14 financial year.
Kaul said the restructured accounts for the first nine months of the financial year stood at Rs1,400 crore against the total portfolio of restructured assets of Rs12,870 crore as of 31 December 2013.
UCO Bank, Kaul said, is looking at a credit growth of 15-16 per cent during the fiscal, and a net interest margin (NIM) of around 3 per cent.
The bank reported a 16 per cent growth in credit flows during the first nine months of the financial year.