UCO Bank shares may rally up to 40% after PCA exit
The central bank said UCO Bank has given a written commitment that it would comply with minimum regulatory capital, net non-performing assets and leverage ratio on an ongoing basis. The lender was on the prompt corrective action list since May 2017. It was barred from increasing risk-weighted assets due to high non-performing asset (NPA) ratios and a negative return on assets.
“It has been falling for the last seven years and has gained 11-12% this year. It can go to ₹20 if there is a positive trigger,” said Chandan Taparia, derivative analyst at Motilal Oswal. The stock has shed over 84% since September 2014.
The Kolkata-based lender had reported a nearly four-fold jump in net profit in the June quarter at ₹10.18 crore compared to ₹2.15 crore profit in the same period a year ago. Its total income gained 2.3% to ₹453.91 crore.
“Those looking for a short-term bounce can buy, but they should not hold it for a long term. If it falls below 12.5, one should avoid the stock,” said Taparia.
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