Hit by sticky assets, state-owned Central Bank’s net profit declined 35.6% y-o-y to R244 crore for the quarter ended September 2011.
The bank’s provisioning has shot up by 79% year-on-year to R431 crore. The shares of the bank closed down by 6% at R102 on Tuesday on the Bombay Stock Exchange.
The bank’s operating profit rose just 2.45% y-o-y to R796 crore. MV Tanksale, CMD, Central Bank of India, said? “The total slippages during the quarter were R1,200 crore though there was no big account in trouble.”
Tanksale added that the NPA situation could deteriorate further from current levels.
?We could see another 25 basis points increase in our NPAs, but we expect to maintain our NIMs at 3%,? he said. With a coverage of 56.78%, the bank’sNPAs increased 50 bps sequentially to 1.37 % at the end of September 2011.
The bank will complete the move to system-based NPAs recognition in the next two quarters. During the second quarter, the bank moved loans in the range of R10 lakh and R1 crore to system-based accounting.
“Loans below R10 lakh are still pending for system based NPA accounting,” added Tanksale.
The bank’s Casa deposits account for 32.82% of total deposits and were up by 25bps sequentially in the quarter ending September. The gross advances increased 12.72% y-o-y to R1,30, 468 crore.
At present, Central Bank’s corporate loans account for 64% of the total advances, while the remaining is accounted for by retail and SME loans.