UCO Bank (UCOBANK) reported Q2 net profit of ₹785.6 crore, up 26.8% from ₹619.8 crore a year ago, while net interest income rose 14% to ₹2,886.4 crore. The jump in earnings eclipses the 4.9% average profit growth seen across the banking sector in the same period.
Asset quality tightened, with gross non‑performing assets falling to 1.96% from 2.08% sequentially, and net NPA dropping to 0.18% versus 0.25% last quarter. The improvement follows a trend of declining default rates in large‑scale banks, positioning UCO Bank above the sector median of 2.2% gross NPA.
Provisions swelled to ₹807.6 crore, a steep rise from ₹234.6 crore in Q1 and ₹588 crore year‑ago, reflecting a cautious stance on potential credit losses. Deposits grew 14.36% in Q2 against FY27 guidance of 10‑12%, and credit expanded 24.7% versus the 12‑14% target, signalling robust loan demand.
Shares reacted sharply: a 3.5% rally pushed the price to ₹24.8 before a 4.4% dip to ₹23.71, settling near ₹23.94 on the NSE. The stock remains 19% off its 2023 peak, with investors weighing the bank’s higher provisions against its stronger asset quality and growth outlook.
Going forward, UCO Bank will issue FY27 guidance on deposit and credit growth next month, while analysts eye whether the higher provisions will translate into a lower net profit margin. The bank’s performance will be benchmarked against peers as the sector navigates regulatory changes and evolving interest‑rate dynamics.