Central Bank of India Reports 51% Surge in Net Profit to Rs 913 Crore

Central Bank of India Reports 51% Surge in Net Profit to Rs 913 Crore

The Central Bank of India has announced a remarkable increase in its net profit for the July-September quarter, achieving a year-on-year growth of nearly 51% to reach Rs 913 crore. This impressive financial performance is attributed to a significant rise in net interest income (NII) and recoveries from previously written-off accounts. In comparison to the previous quarter, the bank's net profit saw a sequential increase of 3.75%.

The bank's total income, which comprises both interest and non-interest income, expanded by 17.08% to Rs 9,849 crore, up from Rs 8,412 crore reported during the same period last year. The net interest income increased by 12.62% year-on-year to Rs 3,410 crore for the quarter ending in September, compared to Rs 3,028 crore during the same quarter last year. As a result, the net interest margin (NIM) improved to 3.44%, up from 3.29% in the previous year.

During a virtual meeting held after the announcement of the results, bank management indicated that NIMs may face some pressure in the future due to a slowdown in credit growth and the high cost of deposits, which could lead to a contraction in margins.

Total business for the bank grew by 7.07% year-on-year, reaching Rs 6.44 lakh crore as of September 30. Advances saw an increase of 9.48% year-on-year, amounting to Rs 2.52 lakh crore for the quarter. Notably, retail advances experienced a substantial growth of 15.48%, totaling Rs 76,373 crore. As of the end of September, total deposits rose by 5.57% to reach Rs 3.91 lakh crore. However, the proportion of low-cost deposits, represented by current accounts and savings accounts (CASA), declined slightly to 48.93% from 49.40% a year earlier.

In terms of asset quality, the bank demonstrated an improvement in return on assets (RoA), which increased to 0.85% for the quarter, reflecting a year-on-year improvement of 23 basis points. This positive trend allowed the lender to significantly enhance its non-performing asset (NPA) ratio. The gross NPA ratio decreased to 4.59%, down from 4.62% a year earlier. Additionally, net NPAs fell to 0.69%, a substantial reduction from 1.64% in September 2023. The provision coverage ratio (PCR), including recoveries from written-off accounts, stood at 96.31% in September, compared to 92.54% the previous year.

The bank's non-interest income, which includes commissions, fees, and recoveries from written-off accounts, surged by 55.23% to Rs 1,647 crore for the quarter ending in September. Recoveries from written-off accounts increased by 40.91% to Rs 620 crore, while treasury income soared by an impressive 240.8% to Rs 392 crore. Furthermore, the bank's total Basel III capital adequacy ratio improved to 16.27%, with a common equity tier 1 ratio of 14.01%, compared to 14.82% a year earlier.