UCO Bank sees credit, deposit growth to exceed guidance

We have surpassed the guidance, but as a practice, we don't revise our guidance during the year. However, we expect the outperformance to continue in this year,” said Saboo. The bank’s credit stood at Rs 2.9 lakh crore as of September 30, while its deposits stood at Rs 3.5 lakh crore. “The festival season has started, typically boosting demand for home and vehicle loans and therefore expect retail loan growth to continue.

We have also extended certain offers during the festival season, including waivers on processing fees and other charges for home and car loans. This will help, and we will be able to garner more business.” The bank’s retail loan book grew 30% year-on-year to Rs 76,817 crore, with 20.29% growth in home loans and a 62% rise in vehicle loans. The lender also sees the strong momentum in corporate loan segment to continue, which has grown 24% YoY to Rs 87,962 crore in the September quarter.

The corporate loan pipeline stands at Rs 10,000 crore, driven by demand from working capital and private capex. Following the central bank’s 25-bps rate hike in October, the bank’s net interest margin is likely to be improved going ahead. “About 66% of the loan book is linked to the external benchmark lending rate and has already repriced. Since deposit repricing lags, NIM is likely to remain supported.

Any future deposit-rate increases should gradually balance the impact.” The bank expects the NIM guidance of 2.8-2.9% to exceed in the year, and it stood at 3% in Q3. The state-owned lender has raised $630 million through FCNR(B) deposits and $100 million through foreign borrowings. With the overseas borrowing window open until December, it plans to tap the market further. “Considering the market situation and pricing, we may access the market for further borrowing in MTN programme or other bilateral deals as well. Discussions are still going on.” 7% YoY to Rs 786 crore in Q2FY27, while net interest income grew 14% to Rs 2,886 crore.