2QFY2013 Result Update | Banking

November 21, 2012

UCO Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 2QFY13 1,013 714 104 1QFY13 1,043 780 362 % chg (qoq) (2.9) (8.6) (71.4) 2QFY12 1,010 711 231 % chg (yoy) 0.3 0.4 (55.1)

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Banking 4,726 1.4 95/45 280,278 10 18,460 5,615 UCBK.BO UCO@IN

`71 -

Source: Company, Angel Research

Uco Bank reported a flattish operating performance and net profit decline of 55.1% yoy during 2QFY2013, on back on interest reversals and/higher provisioning expenses, considering sequential deterioration in the asset quality. NIMs decline on interest reversals; Asset quality deteriorates sequentially: During 2QFY2013, the bank registered a healthy business growth, with both advances and deposits growing by ~24% yoy. Despite a moderate growth in savings deposits, overall CASA deposits grew by 20.3% yoy, aided by a strong growth of 68.1% yoy in current deposits. The management attributed the strong growth in current deposits to the substantial float being made available on opening of rupee account with the bank for facilitating Indo-Iran trade payments (covering 45% of oil imports from Iran and Indian exports). The reported CASA ratio came in at 23.7%. The reported overall NIMs for the bank declined by 20bp qoq to 2.2%, primarily on account of interest reversals of `170cr. The bank registered a subdued growth of 3.6% yoy on the non-interest income (excluding treasury) front, primarily due to lower recoveries. The asset quality for the bank deteriorated further during 2QFY2013, with gross and net NPA levels, on an absolute basis, increasing sequentially by 27.3% and 32.7%, respectively. Slippages came in at `1,541cr, higher compared to `868cr in 1QFY2013 and `841cr in 4QFY2012. Out of incremental slippage of `1,541cr in 2QFY2013, ~`820cr was on account of three accounts belonging to a pharma group. The management expects upgradation of the same in the coming quarter. The annualized slippage ratio came in at 5.3% compared to 3.0% in 1QFY2013 and 3.4% in 4QFY2012. Recoveries/upgrades during the quarter came in at `227cr, lower compared to `274cr in 1QFY2013. PCR dipped by 359bp qoq to 49.1%. The bank restructured advances amounting to `958cr in 2QFY2013, compared to ~`3,800cr during 1QFY2013 (out of ~`3,800cr restructuring in 1QFY2013, ~`2,800cr was on account of restructuring of Air India and two discoms). The management has guided for no major advance to be in the restructuring pipeline. Outlook and valuation: At the CMP, the stock is trading at 0.8x FY2014E ABV, which in our view, is relatively expensive, considering its asset quality profile vis--vis peers trading at a similar or lower valuation. Also, lower provisioning coverage ratio and low core tier-I capital (slower credit growth to accord with Basel-III norms) are a further overhang. Hence, we maintain our Neutral recommendation on the stock. Key financials (Standalone)
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 65.2 14.9 4.1 15.9

Abs. (%) Sensex UCO Bank

3m 3.2 3.9

1yr 15.8 20.4

3yr 8.5 19.1

FY2011 3,845 65.4 907 (10.4) 2.6 12.6 5.6 1.0 0.6 20.7

FY2012 3,902 1.5 1,109 22.3 2.3 14.2 5.0 0.9 0.6 19.4

FY2013E 4,276 9.6 955 (13.9) 2.3 11.8 6.0 1.0 0.5 11.9

FY2014E 5,037 17.8 1,150 20.4 2.4 14.7 4.8 0.8 0.5 13.4

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com

Please refer to important disclosures at the end of this report

UCO Bank | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 performance (Standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Recoveries from written off accounts - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

2QFY13 4,196 3,230 897 32 37 3,183 1,013 213 168 59 45 1 108 1,226 512 332 180 714 597 435 (49) 211 116 13 104 10.9

1QFY13 4,175 3,303 841 25 5 3,131 1,043 233 220 62 13 24 133 1,276 496 332 164 780 409 205 (18) 222 372 9 362 2.4

% chg (qoq) 0.5 (2.2) 6.6 26.6 651.3 1.6 (2.9) (8.7) (23.8) (4.9) 249.7 (97.9) (18.9) (4.0) 3.3 (0.0) 10.0 (8.6) 46.0 112.2 (4.8) (68.7) 40.3 (71.4) 850bp

2QFY12 3,528 2,755 765 7 1 2,518 1,010 203 162 53 41 13 96 1,213 502 335 167 711 475 244 71 160 236 5 231 2.1

% chg (yoy) 18.9 17.2 17.3 358.7 2,653.0 26.4 0.3 4.9 3.6 11.3 9.8 (96.0) 12.9 1.1 1.9 (1.0) 7.9 0.4 25.7 78.1 31.8 (50.6) 158.6 (55.1) 886bp

1HFY13 8,370 6,533 1,738 57 42 6,314 2,056 446 388 121 58 25 242 2,502 1,008 664 344 1,494 1,006 640 (67) 433 488 22 466 4.5

1HFY12 6,929 5,385 1,513 23 9 5,111 1,819 478 352 100 126 30 222 2,297 975 666 309 1,322 785 244 212 329 538 14 523 2.7

% chg (yoy) 20.8 21.3 14.9 145.8 371.8 23.5 13.1 (6.8) 10.1 21.1 (54.1) (16.7) 8.7 8.9 3.4 (0.3) 11.4 13.0 28.2 162.1 31.6 (9.2) 51.5 (10.9) 179bp

Exhibit 2: 2QFY2013 Actual vs Estimates

Particulars (` cr) Net interest income Other income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 1,013 213 1,226 512 714 597 116 13 104

Estimates 1,095 233 1,328 522 807 313 493 109 385

Var. (%) (7.5) (8.7) (7.7) (1.9) (11.5) 90.6 (76.4) (88.3) (73.0)

November 21, 2012

UCO Bank | 2QFY2013 Result Update

Exhibit 3: 2QFY2013 performance analysis (Standalone)

Particulars Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) Credit cost (%) Source: Company, Angel Research 5,888 4.9 3,468 2.9 49.1 5.3 1.0 4,624 3.9 2,614 2.2 52.7 3.0 0.5 27.3 100bp 32.7 71bp (359)bp 235bp 50bp 3,542 3.6 2,022 2.1 52.0 2.1 0.7 66.2 124bp 71.5 83bp (287)bp 326bp 29bp 7.4 10.8 2.2 41.8 7.7 11.3 2.4 38.8 (25)bp (54)bp (20)bp 294bp 7.2 11.4 2.8 43.3 28bp (67)bp (60)bp (155)bp 2QFY13 118,045 162,567 72.6 10,517 28,022 38,539 23.7 12.3 8.1 1QFY13 119,163 155,010 76.9 9,291 26,861 36,151 23.3 12.3 8.2 % chg (qoq) (0.9) 4.9 (426)bp 13.2 4.3 6.6 38bp (6)bp (1)bp 2QFY12 95,549 131,312 72.8 6,257 25,787 32,044 24.4 13.6 8.6 % chg (yoy) 23.5 23.8 (15)bp 68.1 8.7 20.3 (70)bp (128)bp (45)bp

Business growth healthy; NIMs decline sequentially on interest reversals

During 2QFY2013, the bank registered a healthy growth in its business, with both advances and deposits witnessing an increase of ~24% yoy. On the liabilities front, despite a moderate growth of 8.7% yoy in savings deposits, the overall CASA deposits growth came in strong at 20.3% yoy, aided by a strong growth of 68.1% yoy (13.2% qoq) in current deposits. The management attributed the strong growth in current account deposits to the substantial float being made available on opening of rupee account with the bank for facilitating Indo-Iran trade payments (covering 45% of oil imports from Iran and Indian exports). The reported CASA ratio, though moderated on a yoy basis by 70bp to 23.7%, but was up sequentially by 38bp. Higher slippages during the quarter led to interest reversals of ~`170cr, which resulted in a substantial 54bp qoq dip in yield on advances to 10.8%. Cost of deposits declined by 25bp sequentially to 7.4%, on account of robust current account floats and reduced share of high costing bulk deposits. Hence, the reported overall NIMs for the bank declined by 20bp qoq to 2.2%. As per the management, the banks share of bulk deposits (including CDs) to total deposits, above card rate, as of 2QFY2013 stood at ~18%. The management exuded confidence in reducing the share to 15% by FY2013, as per the regulatory diktat.
November 21, 2012

UCO Bank | 2QFY2013 Result Update

Exhibit 4: Healthy business growth in 2QFY2013

Adv. yoy chg (%) 30.0 25.0 20.0 15.0 10.0 72.8 74.0 72.6 75.0 Dep. yoy chg (%) 76.9 CDR (%, RHS) 78.0 77.0 76.0 75.0 74.0 73.0 72.0 71.0 70.0

Exhibit 5: CASA ratio expands qoq, on strong CA floats

(%) 25.0 24.5 24.0 23.5 23.0 22.5 22.0 21.5 21.0 20.5 CASA ratio

24.4

22.3

22.0

23.3

12.4 8.5

18.4 18.5

16.6 6.0

24.0 21.5

5.0 -

23.5 23.8

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 6: 54bp qoq fall in YoA on ~`170cr interest reversal

(%) 12.00 11.50 11.00 10.50 10.00 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 11.43 Yield on advances 11.87 11.54 11.30 10.76

Exhibit 7: Lower YoA, results in 20bp decline in NIMs

(%) 3.10 2.90 2.70 2.50 2.30 2.10 1.90 1.70 1.50 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 Reported NIMs 2.84 2.89 2.71 2.44 2.24

Source: Company, Angel Research

Source: Company, Angel Research

Subdued growth in non-interest income (excluding treasury), on back of lower recoveries

During 2QFY2013, the banks performance on the non-interest income (excluding treasury) front, came in subdued at 3.6% yoy, primarily due to lower recoveries from written-off accounts. On the fee income front, the banks performance was moderate, with a growth of 12.3% yoy. Recoveries from written off accounts came in at a mere `1cr in 2QFY2013 compared to `13cr in 2QFY2012. The income from trading profits (treasury income) came in at `45cr compared to `41cr in 2QFY2012. Overall the non-interest income grew at a muted pace of 4.9% yoy to `213cr,

Asset quality deteriorates sequentially

The banks asset quality deteriorated further during 2QFY2013, with gross and net NPA levels, on an absolute basis, increasing sequentially by 27.3% and 32.7%, respectively. Gross and Net NPA ratios were higher by 100bp and 71bp qoq respectively to 4.9% and 2.9%. Slippages during the quarter came in higher at `1,541cr compared to `868cr in 1QFY2013 and `841cr in 4QFY2012. Out of

November 21, 2012

23.7

UCO Bank | 2QFY2013 Result Update

`1,541cr of incremental slippage in 2QFY2013, ~`820cr was on account of three accounts of a pharma group. The management expects upgradation of the same in the coming quarter. The annualized slippage ratio came in at 5.3% compared to 3.0% in 1QFY2013 and 3.4% in 4QFY2012. Recoveries/upgrades during the quarter came in lower at `227cr, compared to `274cr in 1QFY2013. PCR for the bank dipped by 359bp qoq to 49.1% and remains one of the lowest in the industry.

The bank restructured advances amounting to `958cr in 2QFY2013, compared to ~`3,800cr during 1QFY2013 (out of ~`3,800cr restructuring in 1QFY2013, ~`2,800cr was on account of restructuring of Air India and two discoms). The management has guided for no major advance to be in the restructuring pipeline. Exhibit 8: Slippages elevate further to 5.3% in 2QFY13
Slippages (%) 6.0 4.5 3.0 1.5 0.5 0.3 0.9 Credit cost (%, RHS) 1.0

Exhibit 9: Hence, asset quality deteriorates sequentially

Gross NPAs (%) Net NPAs (%) 54.4 52.0 52.7 51.2 49.1 PCR* (%, RHS) 56.0 54.0 52.0 50.0 48.0 46.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research; note*excluding technical write-offs

1.0 0.8 0.6 0.4

6.0 5.0 4.0 3.0 2.0

2.1

2.2

3.4

3.0

5.3

3.6 2.1

3.5 2.0

3.5 2.0

3.9 2.2

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

Exhibit 10: Network expansion moderates in past 6 months

Branches 2,450 2,400 2,350 2,300 2,250 2,200 2,150 2,100 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research

Exhibit 11: Cost ratios deteriorate sequentially

Cost-to-income ratio (%) Opex to average assets (%, RHS)
1.33 1.09 1.12

ATMs (RHS) 1,000 800 600 400 50.0 45.0 40.0 35.0 30.0

1.35

4.9 2.9

0.2

1.0

1.27

1.50

1.00

2,231

2,260

2,394

2,400

2,411

0.50
41.4 40.0 44.1 38.8 41.8

200 -

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

November 21, 2012

UCO Bank | 2QFY2013 Result Update

Investment concerns
Modest CASA, fee income and weak asset quality to remain an overhang on profitability
Despite having significant semi-urban/rural presence (~59%), heavy reliance on wholesale deposits has resulted in modest CASA franchise for the bank. CASA ratio at 23.7% as of 2QFY2013 remains one of the lowest amongst peers. The banks fee income, at 0.4% of average assets in FY2012, is also on the lower side. In fact during FY2007-12, the bank reported a CAGR of only 9.7% in its fee income, compared to advances posting a CAGR of 19.7%. The banks asset quality has witnessed significant deterioration in the past eighteen months, relatively higher compared to its peers and is expected to remain weak, going ahead as well.

Outlook and valuation

At the CMP, the stock is trading at 0.8x FY2014E ABV, which in our view, is relatively expensive, considering its asset quality profile vis--vis peers trading at a similar or lower valuation. Also, lower provisioning coverage ratio and low core tier-I capital (slower credit growth to accord with Basel-III norms) are a further overhang. Hence, we maintain our Neutral recommendation on the stock.

Exhibit 12: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio
Source: Angel Research

Earlier estimates FY2013 12.0 11.0 22.0 2.4 0.6 8.0 8.0 2.3 54.5 FY2014 12.0 12.0 21.6 2.5 12.8 15.0 15.0 2.3 56.0

Revised estimates FY2013 15.0 15.0 21.6 2.3 (0.8) 5.0 12.0 3.5 50.0 FY2014 12.0 12.0 21.2 2.4 10.6 15.0 15.0 2.5 55.0

November 21, 2012

UCO Bank | 2QFY2013 Result Update

Exhibit 13: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

Earlier estimates 4,440 971 5,411 2,221 3,190 1,567 1,624 325 1,299

Revised estimates 4,276 958 5,234 2,206 3,028 1,905 1,123 168 955

Var. (%) (3.7) (1.3) (3.3) (0.7) (5.1) 21.6 (30.8) (48.1) (26.5)

FY2014 Earlier Revised estimates estimates 5,029 1,095 6,124 2,554 3,570 1,695 1,876 609 1,267 5,037 1,060 6,097 2,537 3,560 1,918 1,642 493 1,150

Var. (%) 0.2 (3.2) (0.4) (0.7) (0.3) 13.2 (12.5) (19.0) (9.3)

Exhibit 14: P/ABV band

180 160 140 120 100 80 60 40 20 0 Price (`) 0.5x 0.8x 1.1x 1.4x 1.7x

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

Source: Company, Angel Research

November 21, 2012

Mar-13

Sep-04

Sep-05

Sep-06

Sep-07

Sep-08

Sep-09

Sep-10

Sep-11

Sep-12

UCO Bank | 2QFY2013 Result Update

Exhibit 15: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Accumulate Neutral Buy Accumulate Buy Accumulate Neutral Accumulate Accumulate Neutral Neutral Neutral Accumulate Buy Neutral Accumulate Neutral Neutral Accumulate Buy Buy Accumulate Neutral Accumulate Accumulate Neutral CMP (`) 1,234 463 662 1,044 23 422 133 102 730 266 55 428 73 394 105 101 174 74 1,330 320 728 2,061 118 71 227 67 55 Tgt. price (`) 1,476 491 1,270 25 492 152 817 294 445 123 195 347 843 2,437 131 250 74 Upside (%) 19.6 6.0 21.7 8.4 16.7 14.3 11.9 10.5 13.1 17.6 12.2 8.5 15.8 18.3 10.3 10.0 10.4 FY2014E P/ABV (x) 1.7 1.1 3.7 1.7 1.0 2.1 0.6 0.7 0.8 0.7 0.7 0.8 0.6 0.6 0.6 0.6 0.6 0.5 1.1 0.7 0.8 1.3 0.7 0.8 0.8 0.5 0.7 FY2014E Tgt. P/ABV (x) 2.0 1.2 2.0 1.1 2.5 0.7 1.0 0.8 0.7 0.8 0.7 0.8 0.9 1.6 0.8 0.9 0.5 FY2014E P/E (x) 8.9 9.0 18.4 12.6 5.9 10.0 4.0 4.7 5.3 4.2 4.6 5.3 3.4 4.0 4.4 4.6 4.2 3.7 6.9 4.9 4.4 8.0 4.4 4.8 4.9 3.1 5.4 FY2012-14E EPS CAGR (%) 16.0 6.7 27.9 21.7 4.2 23.5 (5.6) (4.8) 6.4 16.9 38.9 4.0 102.4 (3.4) 2.5 17.5 2.8 23.0 7.9 29.0 6.8 21.5 11.5 2.0 20.3 18.4 6.1 FY2014E RoA (%) 1.6 1.1 1.9 1.5 0.9 1.5 0.8 0.8 1.0 0.8 0.7 0.8 0.6 0.7 0.8 0.9 1.1 0.6 1.3 0.9 1.0 1.0 0.7 0.5 0.8 0.7 0.5 FY2014E RoE (%) 20.2 13.3 22.0 15.7 16.9 23.5 14.5 13.8 17.0 15.8 16.1 14.6 14.9 14.7 15.6 13.9 16.3 13.1 17.7 14.4 17.3 17.7 16.6 13.4 16.4 15.7 11.9

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

Company Background
UCO Bank is a mid-sized public sector bank with a balance sheet size of ~`1.8lakh cr. Its branches are concentrated in the eastern and north eastern states (~38%), with a relatively large number in the parent state of West Bengal (~15%). It has got significant rural and semi-urban presence, with ~58% of its total network of 2,411 branches and 939 ATMs, located in these areas.

November 21, 2012

UCO Bank | 2QFY2013 Result Update

Exhibit 16: Income statement (Standalone)

Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) OperatingExpenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY09 1,645 10.5 1,020 32.1 2,665 17.9 1,613 23.5 1,052 10.2 488 (15.2) 564 48.9 6 1.1 558 35.3 FY10 2,324 41.3 966 (5.3) 3,290 23.5 1,718 6.5 1,572 49.4 600 23.1 972 72.3 (41) (4.2) 1,012 81.5 FY11 3,845 65.4 925 (4.2) 4,770 45.0 2,075 20.8 2,695 71.5 1,781 196.8 914 (5.9) 8 0.8 907 (10.4) FY12 3,902 1.5 966 4.3 4,868 2.0 2,056 (0.9) 2,811 4.3 1,740 (2.3) 1,071 17.2 (37) (3.5) 1,109 22.3 FY13E 4,276 9.6 958 (0.8) 5,234 7.5 2,206 7.3 3,028 7.7 1,905 9.5 1,123 4.8 168 15.0 955 (13.9) FY14E 5,037 17.8 1,060 10.6 6,097 16.5 2,537 15.0 3,560 17.6 1,918 0.7 1,642 46.2 493 30.0 1,150 20.4

Balance sheet (Standalone)

Y/E March (` cr) Share Capital - Equity - Preference Reserve & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY09 1,249 549 700 2,708 100,222 25.4 2,062 3,075 2,348 111,664 6,589 4,265 29,385 68,804 24.9 719 1,903 111,664 24.4 FY10 1,699 549 1,150 3,511 122,416 22.1 1,889 4,375 3,430 137,319 7,243 862 43,521 82,505 19.9 710 2,479 137,319 23.0 FY11 2,451 628 1,823 4,969 145,278 18.7 1,100 4,375 5,227 163,398 10,404 6,576 42,927 99,071 20.1 739 3,681 163,398 19.0 FY12 2,488 665 1,823 6,126 154,003 6.0 8,526 4,375 4,980 180,498 7,812 5,792 45,772 115,540 16.6 802 4,782 180,498 10.5 FY13E 2,488 665 1,823 6,756 15.0 5,037 4,266 5,833 7,970 3,022 51,415 15.0 868 5,338 11.6 FY14E 2,488 665 1,823 7,543 12.0 5,622 4,159 6,725 7,934 3,373 57,873 12.0 940 5,958 11.6

177,104 198,356

201,484 224,894

132,871 148,816

201,484 224,894

November 21, 2012

UCO Bank | 2QFY2013 Result Update

Ratio analysis (Standalone)

Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE * 1.6 0.5 1.1 0.3 1.5 0.7 2.2 1.6 0.6 0.0 0.6 38.2 21.1 1.9 0.5 1.4 0.2 1.6 0.6 2.2 1.4 0.8 (0.0) 0.8 38.9 31.6 2.6 1.2 1.4 0.1 1.4 0.6 2.0 1.4 0.6 0.0 0.6 34.3 20.7 2.3 1.0 1.3 0.1 1.4 0.4 1.8 1.2 0.6 (0.0) 0.6 30.1 19.4 2.2 1.0 1.2 0.0 1.3 0.5 1.7 1.2 0.6 0.1 0.5 28.9 11.9 2.4 0.9 1.5 0.0 1.5 0.5 2.0 1.2 0.8 0.2 0.5 29.1 13.4 7.1 1.7 1.5 3.9 1.3 3.2 5.7 1.1 4.2 5.1 0.9 4.2 6.1 1.0 2.8 4.9 0.8 3.5 10.2 43.1 1.1 18.4 56.9 2.3 12.6 67.9 3.0 14.2 79.3 3.0 11.8 74.5 2.0 14.7 87.5 2.5 2.2 1.2 1.2 0.3 47.2 2.0 1.2 1.6 0.3 50.0 3.1 1.8 3.3 0.8 51.6 3.5 2.0 2.4 0.4 54.4 5.1 3.0 3.5 0.7 50.0 5.6 2.9 2.5 0.6 55.0 24.1 68.7 11.9 6.5 24.7 67.4 13.2 7.1 22.0 68.2 13.8 8.6 22.3 75.0 12.3 8.1 21.6 75.0 12.0 8.2 21.2 75.0 11.4 8.0 1.7 60.5 0.6 21.1 1.9 52.2 0.8 31.6 2.6 43.5 0.6 20.7 2.3 42.2 0.6 19.4 2.3 42.2 0.5 11.9 2.4 41.6 0.5 13.4 FY09 FY10 FY11 FY12 FY13E FY14E

Note: * RoE calculated on PAT for equity share holders post preference dividend

November 21, 2012

10

UCO Bank | 2QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

UCO Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

November 21, 2012

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