UCO Bank posts strong Q2 FY26 earnings with improved asset quality

UCO Bank announced robust financial results for Q2 FY26, with business growth of 13.23%. This was driven by deposit growth of 10.85% and credit growth of 16.56%. The bank's RAM (Retail, Agri, MSME) segment grew by 22.87%, now constituting 65.23% of total advances. Operating profit for the quarter increased by 12.64% to INR 1,613 crore, and net profit rose by 3% year-over-year to INR 620 crore, supported by a 10.08% growth in net interest income. Global net interest margin (NIM) stood at 2.90%, with domestic NIM at 3.08%, excluding a one-time interest income of INR 107 crore.

Asset quality improved considerably, with gross NPA reducing by 62 bps year-over-year to 2.56% and net NPA by 30 bps year-over-year to 0.43%. The provision coverage ratio (PCR) enhanced to 96.99%. Total recovery and upgradation for the quarter reached INR 792 crore. The bank's capital adequacy ratio remained strong at 17.89%, with Tier 1 capital at 15.90%.

UCO Bank is actively pursuing digital transformation, with total digital business reaching INR 10,554 crore and mobile banking users increasing to 57 lakh by September 2025. Initiatives like tab banking, WhatsApp banking, and new ATM installations are underway. The bank plans to open 150 more branches by March and is exploring co-lending partnerships and new opportunities in renewable energy and capital market financing.