UCO Bank - Q1FY14 Result Review - Angel Broking

UCO Bank announced modest set of numbers. On the operating front, the bank reported strong Net Interest Income (NII) growth of 30.7% yoy to Rs. 1,364cr. Noninterest income grew to Rs. 462cr, registering growth of 98.4%. Operating expenses of the bank grew moderate by 13.3% yoy at Rs. 562cr, thus enabling bank to achieve pre-provision operating profit growth of 62.0% yoy at Rs. 1,264cr.

Asset quality concerns for the bank continued even in this quarter. Gross NPA ratio at increased by 16bp to reach 5.58%, while net NPA ratio was at 3.15% in spite of 81.3% higher provisioning of Rs. 741cr in this quarter.

At the CMP, the stock trades at a valuation of 0.9x FY2014E ABV and 0.8x FY2015E. We maintain our Reduce recommendation on the stock.

Source : Equity Bulls

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