REAL PICTURE OF NPAs:UCO BANK:TP Rs 15-17 May Expiry(Multibagger)
GrossNPA 14931Cr
GNPA 10.98%
Net NPA 8409Cr
NetNPA 6.51%
Above ratios are amongst the HIGHEST in Indian Banking Industry. However, it is only half picture:
FRESH Slippage 7148Cr (Bank has not revealed same in Q3 results. This info from our source and 100% ACCURATE)
Fresh Slippage are more than 5.5% of Advances whereas Industry benchmark is 1%. It means Fresh slippage of UCO Bank are higher BY 450%
Fresh Slippage should also get converted into NPAs in next 1 or 2 quarters.
Likely scenario of NPAs in Q4:
a) As per RBI guidelines, bank has made 50% provision of NPAs in Q3. It means that provision of NPAs in Q4 will also be 2360 crores (same as in Q3).
b) Out of Fresh slippage of 7148 crores, even if one-fourth (very conservative) become NPAs, it means bank will have to provide additional Rs 1800 crore worth NPAs.
Thus, provisioning for NPAs in Q4 alone could be more than Rs 4000-4100 crores. If it happens, Gross NPA BOUND TO JUMP TO 15% in Q4.
SITUATION BECOMES MORE GRIM when you consider the following:
a) NPAs written off in 9m: 1401 Cr
b) Recovery from NPA a/c in 9m: 721Cr
RECOVERY OF 721 cr in 9 months is LESS THAN 5% of Gross NPAs. It means NPAs will rise disproportionately due to very very low ratio of NPA recovery
Based upon such analysis, we are afraid that LOSS in Q4 of UCO Bank may be more than 2500 crores and G NPA 15% or so
Sooner or later, Stock price is bound to crack. SELL MORE.
UCO Bank Ltd:
UCO has reported 1497 cr LOSS for Q3. However, this is just trailer of a full- length movie. UCO has negatives on all parameters and rot/ mess/ malaise is much deeper. We feel that stock can slide to Rs 25-26 Feb expiry and TP Rs 16-18 May expiry(provided markets do not go up sharply). Full detailed report tomorrow. Investors may remember that our record in SHORTSELL ideas is unmatched (Maruti, JDL, BHEL, Pnb, SCI, Cipla etc).
UCO Bank Ltd: Breaking News: Huge Blow:
In Q3, Current Account Deposits have GONE down by 4700 crores (-19%). UCO Bank was sole banker designated for Rupee trade with IRAN and Hence was enjoying Current Account Deposits of Rs 20000 crores with ZERO COST ( as no interest to be paid on same) and same was contributing approx Rs 2000 crores to OPERATING PROFIT of UCO. With USA lifting sanctions on Iran, these Rupee based VOSTRO deposits are no longer required. Withdrawal of funds from this Vostro already started in Q3, leading to reduction of 4700 cr in current account deposit. Once entire amounts of Vostro are withdrawn ( which should happen/ complete in next 1-2 quarters, not only CASA will plunge but UCO WILL report operating LOSS. It means TOTAL LOSS for Q4 should be 2300-2500 crores.
BIG BIG BLOW for UCO which already under big stress from all sides For next update/Breaking News/Revelation pl stay tuned at
www.telegram.me/denofwealth
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