The bank is currently under the Reserve Bank of India's prompt corrective action (PCA) framework. Slippages for the quarter (including divergence found by the central bank) more than tripled during to Rs 3,998 crore.
Central Bank of India reported a net profit of Rs 155.32 crore on a standalone basis for the December quarter, compared to a Rs 718.23-crore loss a year ago. The Q3 profit was aided by a 129% y-o-y rise in non-interest income (NII) to Rs 1,249.41 crore due to better recoveries.
Total income grew 15% y-o-y to Rs 7,278.29 crore. However, advances in Q3 fell 2.8% to Rs 1.66 lakh crore. Sequentially, there was a degrowth in the loan book by around Rs 2,000 crore. “In agriculture, MSME and corporate (segments) there is a negative growth…. the disbursement trend is improving month-on-month, but what we are seeing is the repayment is more than disbursements,” said Pallav Mohapatra, MD and CEO, Central Bank of India. The bank has seen a consistent growth in the retail segment, primarily in housing loans, Mohapatra added.
NII was up 11.34% y-o-y to Rs 2,022 crore. Net interest margin was 10 basis points (bps) higher than the last quarter at 2.92%. NII was boosted by a Rs 383-crore write-back on account of Ruchi Soya and a Rs 160-crore write-back for the Essar Steel account, the bank’s management said. Recoveries in written-off accounts grew nearly 20 times from a year ago to Rs 520 crore. Mohapatra said the bank is expecting additional recoveries in some other accounts, including Religare Finvest and Flexituff, in the fourth quarter.
Total deposits for the quarter grew 4.4% y-o-y to Rs 3.08 lakh crore. Current accounts fell 5.3% y-o-y to Rs 13,918 crore, while savings accounts grew 7.8% to Rs 1.26 lakh crore. Term deposits grew 3.3% y-o-y to Rs 1.68 lakh crore. CASA as a share of total deposits improved 85 bps y-o-y to 45.49%. Provisions in Q3 fell 31% y-o-y to Rs 1,249 crore. Total expenses reduced marginally to Rs 5,582 crore aided by lower employee costs.
The bank aims to raise Rs 200 crore through sale of its real estate assets in the fourth quarter. Additionally, it is looking to sell its entire 20% stake in Indo Zambia Bank for Rs 60 crore. Bank of India and Bank of Baroda hold 20% stake each in Indo Zambia Bank, and the rest is held by the Zambian government. “We are in talks with Bank of Baroda and Bank of India to buy our stake in the bank,” Mohapatra said.
Asset quality of the bank worsened, with gross non-performing assets (NPA) ratio for the December quarter increasing 10 bps sequentially to 19.99%. Net NPA ratio was also 136 bps higher sequentially at 9.26% during the third quarter. The bank is currently under the Reserve Bank of India’s prompt corrective action (PCA) framework. Slippages for the quarter (including divergence found by the central bank) more than tripled during to Rs 3,998 crore. Of the total slippage, around Rs 900 crore was on account of Dewan Housing Finance Corporation (DHFL) and around Rs 1,400 crore is from corporate accounts including an IL&FS group company and Simplex Infrastructure, the management said.
As on December 31, capital adequacy ratio of Central Bank of India stood at 12.83%, up 350 bps YoY. Common equity tier 1 ratio (CET-1 ratio) stood at 10.64%, compared with 7.39% a year ago.