• Business grew by 14.595% YoY with gross advances growing 19.44% YoY (significantly exceeding 12-14% guidance)
• CASA ratio improved to 38.65%, up 75 bps YoY, exceeding 37-38% guidance range
• RAM segment grew 24%+ with Retail at 26%, Agriculture at 26%, and MSME at 19% growth
• Gross NPA improved to 2.17% (down 52 bps YoY) and Net NPA to 0.27% (down 23 bps), with PCR at 97.79%
• Fee-based income surged 32% YoY to INR 516 crore from INR 389 crore
• Digital transformation delivered INR 25,000 crore in digital business across assets and liabilities with 31 journeys completed
• Mobile banking users increased from 82 lakh to 153 lakh in three years, with active users jumping from 14 lakh to 70 lakh (46% activation rate)
• Board approved 4.4% dividend (44 paise per share) representing ~20% payout ratio

UCO Bank delivered stellar FY26 results, exceeding guidance across nearly all parameters with 19.44% credit growth, net profit of INR 2,768 crore (up 13.21% YoY), and significant asset quality improvement (GNPA down to 2.17%). Management demonstrated strong confidence through ambitious digital transformation initiatives, substantial IT investments of INR 899 crore, and maintained conservative FY27 guidance despite outperformance, signaling disciplined growth strategy rather than geopolitical concerns.

UCO Bank reported strong financial performance for FY26 with total business growth of 14.595% YoY. Gross advances grew 19.44% YoY while deposits increased 11.59%. Within deposits, CASA grew 12.46% with savings up 11.878% and current accounts up 16.77%. The bank achieved full-year net profit of INR 2,768 crore, representing 13.21% YoY growth, while Q4 net profit reached INR 1,801 crore (22% YoY growth). Operating profit for the full year was INR 6,429 crore, up 6.49%. Net Interest Margin (NIM) came in at 3.03% globally and 3.23% domestically, exceeding guidance of 2.8-2.9%. Credit cost was 0.62%, well below the <1% guidance. The cost-to-income ratio improved significantly by 581 bps to 52.66%. Capital adequacy ratio strengthened to 18.61% with Tier 1 at 16.59%. Business per employee improved to INR 28 crore from INR 24 crore, and business per branch increased to INR 173 crore from INR 155 crore. The CD ratio reached 80.21%, above the 75-77% guidance range.

Management exhibited strong confidence throughout the call, emphasizing consistent outperformance of guidance over the past three years. The MD clarified that conservative FY27 guidance (12-14% credit growth) is deliberate strategy rather than concern over geopolitical issues, noting the bank has maintained this guidance range for three years while achieving 16%, 17.72%, and 19.44% actual growth. Leadership emphasized disciplined pricing discipline, stating they won't compromise on margins for credit growth in corporate segments. Significant strategic focus was placed on digital transformation through Project Parivartan, with management highlighting the INR 1,000+ crore IT budget for FY27 (increasing spend from INR 576 crore in FY24 to INR 899 crore in FY26). Management demonstrated proactive risk management with INR 1,900 crore in additional provisions (INR 1,038 crore ECL + INR 341 crore contingency + INR 530 crore COVID provision) as buffers. The tone was optimistic about maintaining growth momentum while improving asset quality, with guidance for GNPA <2%, Net NPA <0.2%, and slippage ratio <1% for FY27.

While management downplayed immediate impact, the West Asia geopolitical crisis was raised as a concern by analysts, particularly for the MSME segment. Management acknowledged SMA-1 increased from INR 260 crore to INR 651 crore, though they attributed this to calendar effects (February's 28 days causing bucket shifting from SMA-2 to SMA-1). Treasury operations showed negative performance with a loss of INR 16 crore in Q4 versus INR 130 crore profit in Q3, attributed to yield movements exceeding 7% causing mark-to-market losses on AFS and HFT books (though management noted recovery post-quarter end). The AFS reserve position is negative at INR 140 crore. Pricing pressure in corporate segments was acknowledged, with management indicating they have INR 14,000 crore pipeline but are rejecting deals due to inadequate pricing. Bulk deposit management remains a focus area as CD ratio climbed to 80.21%, requiring continued deposit mobilization. The bank has not yet executed its board-approved QIP, with management citing current market conditions and awaiting AGM approval. Competition for quality assets and maintaining NIM in a potentially declining rate environment could pressure profitability.

Revenue Outlook: Credit growth guidance of 12-14%; Deposit growth 10-12% for FY27

Margin Outlook: NIM guidance of 2.8-2.9% (global) for FY27; targeting to reach ~0.95-1% ROA by end of FY27

Key Targets:

• CASA ratio: 37-38%
• RAM percentage: 62-65% (upgraded from previous 61-63%)
• CD ratio: 80-82%
• Credit cost: <0.75%
• Gross NPA: <2%
• Net NPA: <0.2%
• Slippage ratio: <1%
• Recovery and upgradation: INR 2,000-2,500 crore

The Q&A session focused heavily on reconciling the bank's strong performance with conservative FY27 guidance, with analysts seeking to understand whether geopolitical concerns were driving caution. Management consistently emphasized their track record of conservative guidance and outperformance as deliberate strategy. Significant attention was paid to asset quality metrics, particularly the SMA-1 increase, though management successfully attributed this to technical calendar effects. Analysts probed digital initiatives extensively, with management highlighting impressive traction (250,000+ digital loans, 25,000 crore digital business). Treasury volatility and negative AFS reserves were raised as concerns, with management acknowledging Q4 mark-to-market losses but noting post-quarter recovery. The deposit growth strategy and CASA maintenance despite higher CD ratios was another focus area, with management emphasizing retail franchise over bulk deposits. Multiple analysts praised the results while seeking clarity on provision buffers (INR 1,900 crore confirmed), cost-to-income improvement drivers (fee income growth and expenditure control), and ROA trajectory toward 1%. The QIP timing question revealed management's cautious approach to capital raising despite board approval. Overall, analysts appeared satisfied with explanations but remained focused on sustainability of margins and asset quality in uncertain macro environment.