Earnings call transcript: UCO Bank posts strong Q2 2026 growth as stock slips

UCO Bank reported a strong Q2 2026 financial performance, with net profit rising 26.77% year on year to INR 786 crore, driven by faster loan growth, higher fee income, and improved asset quality. Total business grew 18.81% to INR 637,280 crore, while gross advances increased 24.70% to INR 287,690 crore, surpassing the bank's full-year growth guidance.

Deposits climbed 14.36% to INR 349,590 crore, outpacing expectations and supporting loan expansion. The bank maintained a solid capital adequacy ratio of 18.85%, with Tier 1 capital at 17.27%. Gross NPA decreased to 1.96%, and net NPA fell to 0.18%, both below targets. Key sectors, including retail, agriculture, MSME, and corporate lending, posted double-digit growth, with retail advances up 30.23% and agriculture advances up 29.59%.

Management highlighted that the bank's RAM portfolio (retail, agriculture, and MSME) reached INR 168,736 crore, accounting for 65% of total advances, within their target range. The bank's deposit base expanded, with CASA deposits rising 10.59% to INR 122,259 crore and the CASA ratio at 36.77%. Profitability improved, with operating profit up 16.04% to INR 1,872 crore and net interest income growing 13.96% to INR 2,886 crore.

Fee-based income jumped 34.66% to INR 558 crore. Despite a modest stock price decline to $23.53, which represents a 1.79% drop, the results indicate that the bank has exceeded its own targets, and the market may have already priced in some of the gains.