UCO Bank reported a 27% rise in net profit to ₹786 crore for the quarter ended September 2026, supported by robust credit growth. Gross advances jumped 24.7% to ₹2.87 lakh crore, outpacing deposit growth. Investors will watch how the bank balances its rising credit-to-deposit ratio with liquidity management.
UCO Bank reported a net profit of ₹786 crore for the quarter ended September 30, 2026, representing a 27% increase from the ₹620 crore recorded in the same period last year. This performance was driven by healthy credit expansion and improved asset quality metrics that protected the bank's bottom line. Operating profit for the state-run lender climbed 16% to ₹1,872 crore during the quarter.
Core business income remained strong, with net interest income rising nearly 14% to ₹2,886 crore. The global net interest margin stabilized at 3.00%, reflecting a steady balance between the interest earned on loans and the interest paid on deposits. Fee-based income also played a role in the improved performance, rising 35% to ₹558 crore.
Lending growth was the primary driver of the bank's activity, with gross advances surging 24.7% to ₹2,87,690 crore. This growth was particularly notable in the RAM segment—covering Retail, Agriculture, and MSME sectors—which grew 27% to reach ₹1,68,736 crore. In comparison, total deposits grew at a slower pace of 14.36% to ₹3,49,590 crore. This gap caused the credit-to-deposit ratio to increase to 82.29%, up from 75.47% in the previous year. While this highlights strong loan demand, shareholders typically monitor how banks manage deposit mobilization to ensure this lending pace remains sustainable.
Asset quality continued to show improvement. Gross non-performing assets, or bad loans, dropped to 1.96%, while net bad loans improved to 0.18%. The bank also maintained a high provision coverage ratio of 98.36%, indicating that it has set aside sufficient funds to cover potential risks from legacy accounts. With a capital adequacy ratio of 18.85%, UCO Bank remains well-capitalized to support further growth and meet regulatory standards.
The key focus for investors in the coming quarters will be the bank's ability to maintain these loan growth levels while managing deposit costs and liquidity. Monitoring the credit-to-deposit ratio and the bank’s strategy for attracting new deposits will be important for assessing the sustainability of this growth trajectory.