Kolkata: State-run lender UCO Bank which is expecting to recover a major amount in NPA through resolution in NCLT, is focusing to check further slippages and reduce expenses by emphasing on low capital requirement advances, said its Annual Report.
The lender said the performance of the banking sector, public sector banks in particular, continued to be subdued in the current financial year.
Gross non-performing assets (GNPA) ratio of SCBs (schedule commercial banks) increased to more than 10 per cent. Stressed advances ratio rose.
"In this scenario, Bank future Plan and strategies are to reduce non-performing assets (NPA) and check further slippages.
"Bank has put all its efforts to recover the bad loans. Moreover, containment in expenses and increase in non-interest income will be also in focus for a turnaround," said the Annual Report.
To reduce the expenses, the lender has dismantled Circles offices and 18 service branches.
"The biggest challenges before the bank are to maintain RWA (risk weighted assets) and CRAR as per the requirement of the government guidelines/Regulatory Standard.
"So the focus has been given on low capital requirement advances such as LCBD business. Retail, MSME and Agriculture are the core area of the advances of the bank," it said.
Bank has already decided not to go for high-cost deposit so that low-cost deposit (CASA) will be more.
Among the other strategy enhancing non-interest income, reduction in expenses and promoting e-product is also important, the lender said.
"The bank expects to recover a major amount in NPAs through NCLT resolution. Emphasise on improving CASA deposits and retail advances will be continued at faster pace," bank's MD and CEO, R.K.Takkar said in the report while addressing the shareholders.
The increasing trend of NPAs in the banking industry over last four years has become a concern for the Bank.
Gross NPA level of the Bank increased from 17.12 per cent in March, 2017, to 24.64 per cent in March, 2018, and the quantum of GNPAs has increased from Rs 22, 540.95 crore to Rs 30,549.92 crore respectively.
The NNPA (net NPA) percentage increased to 13.10 per cent from 8.94 per cent during the previous year.
During the FY 2017-18, the bank has witnessed fresh slippages of Rs 15,033.80 crore.
"Accounts eligible for National Company Law Tribunal (NCLT) are being explored vigorously. Bank closely remained in touch with other Lenders/ operational creditors, on regular basis, for discussion on way forward in respect of filing NCLT cases," the lender said.
For portfolio reduction in GNPA, the bank has also given special emphasis to sale of assets to ARCs (Asset Reconstruction Companies) for the year ended March 31, 2018 for Rs 1,764.29 crore as compared to Rs 11, 23.41 crore in previous year.