UCO Bank eyes bad debt recovery of Rs 600 crore in Q4: Soma Sankara Prasad, MD and CEO

Soma Sankara Prasad, MD and CEO, told FE that the bank expects a cash recovery of Rs 400 crore and an upgrade of Rs 200 crore in the fourth quarter. In the third quarter, the cash recovery and upgrade were Rs 363 crore and Rs 191 crore, respectively.

UCO Bank expects cash recovery and upgrade of bad debt accounts of up to Rs 600 crore in Q4, although high level of stress is seen in portfolio from sale to market retail, agriculture and MSMEs (RAM). Soma Sankara Prasad, MD and CEO, told FE that the bank expects a cash recovery of Rs 400 crore and an upgrade of Rs 200 crore in the fourth quarter. In the third quarter, the cash recovery and upgrade were Rs 363 crore and Rs 191 crore, respectively.

Regarding slippages or the further increase in non-performing assets (NPAs) in the current quarter, Prasad said: “We don’t see a lot of stress in the corporate segment, except in a major account that falls under the space. FMCG.But, we made sufficient provisions on that account in the third quarter itself.Significantly, Future Retail lenders began classifying loans to the retailer as NPA after the company missed payments to banks.

Prasad said the bank is seeing a high level of stress in the RAM portfolio going forward. “This is particularly the case in the case of the Kisan credit card wallet in the context of agriculture and with regard to accounts where the moratorium granted is coming to an end,” he said. “However, we are confident that we would be able to stop the slippages through close monitoring and recovery. In addition, the bank already holds more than adequate provisioning, which will cushion the impact of the slippages on the profitability.

UCO Bank’s further slippages in the third quarter amounted to Rs 579 crore. The lender said that to contain slippages, it is “proactively” reassessing working capital facilities extended to various borrowers to ensure customers do not face liquidity and funding issues. “To strengthen the oversight mechanism, especially for the RAM segment, the bank is in the process of onboarding a comprehensive software tool/solution for which the process has already been initiated,” Prasad said.

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