UCO Bank eyeing Rs 600-crore bad loans recovery in Q4: Soma Sankara Prasad, MD & CEO
Soma Sankara Prasad, MD & CEO, told FE that the bank is expecting cash recovery of Rs 400 crore and upgradation of Rs 200 crore in Q4. In the third quarter, the cash recovery and upgradation were at Rs 363 crore and Rs 191 crore, respectively.
UCO Bank is expecting cash recovery and upgradation from bad loans accounts to the extent of Rs 600 crore in the fourth quarter, although an elevated level of stress is observed in the retail, agriculture and MSME (RAM) portfolio going forward. Soma Sankara Prasad, MD & CEO, told FE that the bank is expecting cash recovery of Rs 400 crore and upgradation of Rs 200 crore in Q4. In the third quarter, the cash recovery and upgradation were at Rs 363 crore and Rs 191 crore, respectively.
On slippages or fresh accretion to non-performing assets (NPAs) in the ongoing quarter, Prasad said, “We do not see much stress in the corporate segment, except in one major account which is under the FMCG space. But, we made sufficient provisions against this account in the third quarter itself.” Significantly, lenders to Future Retail have started classifying loans to the retailer as NPAs after the company missed payments to the banks.
Prasad said the bank observes an elevated level of stress in the RAM portfolio going forward. “This is especially so in case of the Kisan Credit Card portfolio under agriculture and in respect of accounts where moratorium accorded is coming to an end,” he said. “However, we are confident that we would be able to arrest slippages by close monitoring and recovery. Moreover, the bank is already holding more than adequate provisioning and this will cushion the impact of slippages on profitability.”
UCO Bank’s fresh slippages in Q3 stood at Rs 579 crore. The lender said to contain slippages, it is “proactively” reassessing working capital facilities allowed to various borrowers in order to ensure that customers do not face liquidity and funding issues. “To strengthen the monitoring mechanism, particularly for the RAM segment, the bank is in the process of on-boarding a comprehensive software tool/solution for which the process has already been initiated,” Prasad said.