Synopsis:
The government has allowed UCO Bank to handle payments for Nayara Energy, after the company faced restrictions from Indian and international banks due to European Union sanctions.
The shares of the commercial bank, which are engaged in offering services such as retail banking, corporate banking, and treasury operations, caught the attention after the government allowed it to manage payments for Nayara Energy, which had been restricted by Indian and international banks due to European Union sanctions.
With a market capitalization of Rs.37,430.58 crore, the shares of UCO Bank were trading at Rs.29.85, up by 1.39 percent from the previous day’s closing price of Rs.29.44.
News
The government has allowed state-owned UCO Bank to manage trade payments of Nayara Energy, which had been restricted by many Indian and international banks due to EU sanctions.
UCO Bank has met with finance ministry officials and was chosen because of its experience in handling oil trades with sanctioned countries like Iran. The bank will help Nayara continue its operations, though details such as the currency for transactions are still being finalized.
Nayara Energy, partly owned by Russian company Rosneft, is important to India’s energy supply, contributing significantly to refining capacity and retail fuel distribution. EU sanctions in July disrupted the company’s financial operations, forcing it to reduce refinery output and request government help to secure shipments. The situation shows how sanctions on Russian-linked firms can impact global markets, while India seeks ways to maintain energy security without violating rules.
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About the Company
UCO Bank is a government-owned commercial bank in India that provides a wide range of banking services, such as loans, deposits, international banking, and services for Non-Resident Indians.
The bank also has several branches authorized to collect direct taxes in India. As of March 31, 2023, UCO Bank operates 230 branches and 34 regional offices across the country. Its headquarters is in Kolkata, and it has an international presence with four branches located in Singapore and Hong Kong.
The gross non-performing assets of the company stand at 2.63 percent. This figure has decreased by 69 basis points compared to the previous year. Furthermore, its Net NPAs are at a 0.45 percent.
In Q1FY26, Interest earned rose to Rs.6,436 crore from Rs.6,023 crore in Q1FY25. Net profit rose to Rs.607.4 from Rs.550.9 The firm’s return on equity is 8.36 percent, and its return on capital employed is 5.76 percent. The price-to-earnings ratio of the firm is 15.08, and the industry average is 7.69.
Written by Jhanavi Sivakumar
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