UCO Bank has reported a 13.3% year-on-year (YoY) increase in total business for the second quarter of FY2025, taking the figure to Rs. 5.37 lakh crore. The growth was driven by strong advances, a healthy deposit base, and continued improvement in asset quality. The state-owned lender’s total advances rose to Rs. 2.23 lakh crore, while deposits climbed to Rs. 3.14 lakh crore. The bank’s performance underscores steady momentum in credit demand and retail lending, supported by its digital transformation initiatives and risk management improvements. UCO Bank’s management remains optimistic about sustaining double-digit growth in the upcoming quarters.
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Robust Growth Across Key Segments
UCO Bank’s total business — a combination of advances and deposits — touched Rs. 5.37 lakh crore in Q2 FY2025, reflecting broad-based growth across retail, corporate, and agricultural lending segments. Advances expanded by 14.1% YoY, reaching Rs. 2.23 lakh crore, while deposits grew 12.8% YoY to Rs. 3.14 lakh crore.
The steady expansion highlights the bank’s improved credit disbursement capabilities, underpinned by an emphasis on quality lending, enhanced digital processes, and strengthened relationships with retail and MSME borrowers.
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Advances Growth and Credit Momentum
The advances portfolio continues to be the main growth driver, with notable traction in the retail, agriculture, and MSME sectors — collectively known as the RAM segment. The bank has been consciously expanding its loan book in these areas, which offer better margins and lower default risks compared to large corporate exposures.
This focused lending strategy aligns with the broader industry trend of shifting toward diversified and risk-calibrated portfolios. The bank’s improved underwriting standards and data-driven credit assessment tools have contributed to better asset quality and reduced non-performing asset (NPA) formation.
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Deposits and CASA Performance
On the liabilities front, UCO Bank reported a 12.8% increase in total deposits, supported by strong mobilization of low-cost Current Account Savings Account (CASA) deposits. The bank’s CASA ratio remains healthy, ensuring access to low-cost funds and supporting net interest margins (NIMs).
A sustained rise in retail deposits, coupled with stable corporate accounts, has strengthened the bank’s liquidity position. This provides ample scope for continued lending growth and supports profitability in a tightening monetary environment.
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Asset Quality and Operational Efficiency
While the bank has not disclosed its latest asset quality ratios in the preliminary business update, UCO Bank’s previous quarters have shown steady improvement in Gross and Net NPA levels. Operational efficiency has also improved through the adoption of digitized loan processing, AI-driven fraud detection, and centralized monitoring systems.
The bank’s focus on digital channels and cost optimization is expected to improve the Cost-to-Income ratio and bolster return on assets (ROA) in the coming quarters.
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Strategic Outlook
UCO Bank’s performance in Q2 FY2025 demonstrates resilient growth and improving operational fundamentals, supported by an expanding customer base and technology-driven efficiency gains. Management has reiterated its target of maintaining double-digit credit growth through FY2026, while continuing to strengthen risk management and compliance frameworks.
With the government’s ongoing push for financial inclusion and digital banking, UCO Bank is well-positioned to leverage emerging opportunities in retail lending, MSME financing, and green credit initiatives.
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Conclusion
The 13.3% YoY increase in UCO Bank’s total business to Rs. 5.37 lakh crore marks a significant milestone in its turnaround journey. The bank’s balanced growth across advances and deposits, coupled with continued improvement in asset quality and digital adoption, underscores a sustainable recovery trajectory. As the macroeconomic environment stabilizes and credit demand remains robust, UCO Bank’s prudent strategy and strengthened balance sheet position it favorably for consistent performance in the forthcoming quarters.
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