Kolkata: State-owned Uco Bank may become another candidate to exit Reserve Bank of India’s restrictive prompt corrective action (PCA) framework since it booked net profit after 17 quarters and complied to the parameters in respect to asset quality, leverage ratio and capital adequacy.

It has reported net profit of Rs 17 crore for the March quarter, against net loss of Rs 1552 crore in the year ago period, helping it to turn return on assets (RoA) to barely positive. Even as RoA needs to be positive for the full year for any bank to get out of PCA, but RBI had taken a liberal view in case of other lenders such as Bank of India or Bank of Corporation Bank.

On Thursday, Indian Overseas Bank also reported favourable numbers to place its claim for getting out of PCA.

Uco chief executive AK Goel said that getting out of PCA would help the bank boost its non-fund business and meet the demand for unsecured loans from large corporates.

Its operating profit for the March quarter rose 76 percent to Rs 1217 crore as against Rs 691 crore in the year ago period. Operating profit for the quarter was the highest in the last 18 quarters.

Goel said the treasury played a vital role in turning around the bank with Rs 244 crore profit as against Rs 67 crore in the period under review while recovery improved to Rs 237 crore from Rs 86 crore in the same period. Its net interest income marginally rose to Rs 1256 crore from Rs 1237 crore.

Regarding the PCA parameters, the bank improved net non-performing assets (NPA) ratio to 5.45 percent, below the six percent threshold, leverage ratio to above 3.5 percent and boost capital adequacy ratio to 11.7 percent, above the minimum stipulation of 10.875 percent.

Gross NPA ratio improved to 16.77 percent as on March 31 from 25 percent a year ago. Provision coverage ratio rose to 85.5 percent 74.9 percent in the same period.

The bank’s stock price rose 15.5 percent to Rs 16.14 on BSE.

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