Kolkata-based UCO Bank said it set a profit target of ₹2,500 crore for fiscal 2023-24, enthused by this year’s performance so far. File.
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Kolkata-based UCO Bank said it set a profit target of ₹2,500 crore for fiscal 2023-24, enthused by this year’s performance so far.
Soma Sankara Prasad, UCO Bank’s Managing Director and CEO told The Hindu on Tuesday that by December 2022 profit reached ₹1,296 crore as against the current fiscal, 2022-23, target of ₹1500 crore.
“We have already reached ₹1,296 crore out of the ₹1,500 crore we are targeting this year and we are confident that we will overshoot our profit target for the year,” he said.
The increase in repo rate has helped in increase of net interest margin (NIM), Mr. Prasad said. “Our NPA slippage has come down dramatically with gross NPA reducing to 5.63% and net NPA sliding to 1.66%.’‘
During the PCA (Prompt Corrective Action) period, the bank concentrated on recovery of bad loans, he said.
To open 43 digital units to improve profitability
Mr. Prasad further said, to improve profitability and also to bring down the operational cost, the bank would set up 43 digital banking units (DBUs) across the country. Three of these DBUs are operational in Puri, Cuttack and Ajmir.
“This will bring down the cost of running operations. The ratio between the cost of running traditional branches to digital banking units is 95:5, which means a huge cost saving, he elaborated.
Although a sizable chunk of customers was tech savvy and digitally-oriented, some of them may still want some help. DBUs would have one to two staff to help such customers. “We are exploring a cost-effective model of banking, we will be opening DBUs in high footfall areas,” he added.
Also, UCO Bank would have opened 200 traditional branches across the country by the end of March 2023.
Bank to explore temp-staffing to cut talent cost
According to Mr. Prasad, the bank was also exploring an outsourcing model to bring down the employee cost. “We are looking at deploying tempstaff routine tasks such as sales, marketing recovery, client engagement, account opening etc. This will significantly bring down our employee cost,’‘ he added.
The bank has already hired 1000 people in the current fiscal and has plans to hire a similar number in the coming fiscal as well.
Responding to a query on the impact of the recession on home and auto segments, Mr. Prasad clarified that his bank was not seeing any slackening of demand in any of its key portfolios.
