A key factor to watch with UCO Bank right now is its recent improvement in capital adequacy and the shift in its credit-deposit ratio, which has looked more balanced compared to previous years. However, even with operational improvements, one needs to consider the ongoing risks tied to public sector banks: government influence in lending, potential for increased provisioning if stressed assets rise, and sensitivity to macroeconomic changes.
It might also help to track any upcoming RBI policy changes or sector reforms that could impact margins or profitability for PSBs as a whole. Sometimes these external catalysts can move the stocks more than fundamentals alone.
