UCO Bank actually posted a loss before tax at Rs.251 crore v/s net profit of Rs.23 crore (YoY) and Rs.91 crore (QoQ). It was only thanks to the tax credit write back of Rs.331 crore that it ended Q4FY21 with a net profit of Rs.80 crore. This, on the face of it, looks like a huge 5-times rise on YoY from its Q4FY20 net profit of Rs.17 crore.

Total revenue for the bank rose 9.5% (YoY) at Rs.4937 crore, in which, apart from retail banking, all others- treasury and corporate, both were flat. But in terms of the profit, what added was treasury, which showed a 30% rise while corporate and retail banking were loss making – they have been making losses consistently.

In terms of asset quality, Gross NPA came down marginally from 9.8% to 9.59% (QoQ) though Net NPA rose from 2.97% to 3.94%.

The Bank’s Board  approved the proposal for raising of equity capital aggregating to Rs 3,000 crore for FY22 and this could be through various modes, such as follow on public offer (FPO), qualified institutional placement (QIP) and preferential issue, subject to necessary approvals from shareholders, government, RBI and Sebi.

The market seems to be focused only on the ‘5-times’ rise in profit and slight Gross NPA improvement as the stock is in the green, opening at Rs.13.61, up 3.5% and rising to intraday high at Rs.14.06. Its 20% UC for the day is at Rs.15.78.