UCO Bank reported a 15.46% year-on-year rise in total business to ₹6.05 lakh crore for the quarter ending June 30, 2026. Alongside this loan growth, the bank received major relief in a GST dispute, with tax liability slashed from ₹1,473 crore to ₹4.86 crore. This eases pressure on its financial reserves.
What Happened
State-run UCO Bank announced a 15.46% year-on-year growth in total business, reaching ₹6.05 lakh crore as of June 30, 2026. This performance was driven by strong demand for credit and a steady rise in deposits. Along with this growth update, the bank received a significant favorable ruling in a Goods and Services Tax (GST) dispute. The Commissioner of GST & Central Excise (Appeals-I), Mumbai, effectively reduced the bank’s total tax liability related to a prior demand from ₹1,473.48 crore to ₹4.86 crore, providing substantial relief to its balance sheet.
The GST Relief Explained
For investors, the reduction in tax liability is a positive development. A liability of over ₹1,400 crore, if enforced, would have weighed heavily on the bank’s capital reserves and earnings. With the tax authorities accepting a significantly lower amount, the bank avoids a large outflow of cash. This provides immediate financial clarity and removes a major area of uncertainty regarding future payments. The bank has indicated that it is now reviewing the order to take necessary next steps to close the matter.
Loan Growth And The Credit-Deposit Ratio
UCO Bank’s business growth was led by a strong jump in advances, which rose by 21.33% to ₹2.73 lakh crore. Deposits also saw healthy growth, increasing 11.04% to ₹3.32 lakh crore.
A key metric for banks is the credit-deposit ratio, which shows how much of the money deposited by customers is being converted into loans. UCO Bank’s ratio improved to 82.15% from 75.38% a year ago. A higher ratio generally means the bank is using its deposit base more effectively to generate interest income, which can support higher earnings. However, investors often watch this metric closely, as relying heavily on lending can sometimes increase the risk of bad loans if the economic environment weakens.
How The Stock Reacted
Following the announcement, UCO Bank’s share price showed a modest positive movement, closing at ₹27.14 on the BSE, marking a 0.89% increase for the day. While the market reacted with cautious optimism, the stock price generally reflects both the immediate relief from the tax order and the broader trend of credit growth in the public sector banking space.
Asset Quality And What Investors Should Track
While loan growth is a positive sign, the most important monitorable for any banking investor remains asset quality. As the bank expands its loan book at a double-digit pace, the market will look for details on whether this growth is coming from safe, high-quality borrowers or if there is a shift toward riskier segments.
Investors should track the bank’s upcoming quarterly results for:
- Net Interest Margins (NIMs), which will show if the bank is maintaining profitability on its loans.
- Net Non-Performing Assets (NPAs), to ensure that the rapid loan growth is not leading to a rise in bad debts.
- Cost of deposits, to see if the bank is paying more to attract the funds needed for its loan expansion.
- Any further updates on the GST order execution to ensure the tax relief is fully reflected in the financial statements.