Central Bank of India reports ₹310 cr net profit in Q4FY22

 

Central Bank of India reported a standalone net profit of ₹310 crore in the fourth quarter against a net loss of ₹1,349 crore in the year-ago quarter.

The bottom line improved on the back of healthy growth in net interest income (NII), sharp decline in loan loss provisions and write-back in standard asset provisions.

The public sector bank reported a net profit of ₹1,045 crore in FY22 against a net loss of ₹888 crore in FY21.

In the reporting quarter, NII (difference between interest earned and interest expended) jumped 59 per cent year-on-year (yoy) to ₹2,416 crore (₹1,516 crore in the year-ago quarter).

Non-interest income, comprising fee-based income, trading income, recovery in written-off accounts, and others, declined about 26 per cent yoy to ₹632 crore (₹851 crore).

Provisions towards non-performing assets (NPAs) declined about 73 per cent yoy to ₹893 crore (₹3,259 crore). Write-back in standard asset provisions was at ₹293 crore.

Net interest margin improved to 3.26 per cent in the reporting quarter against 2.04 per cent in the year ago quarter.

Total advances up 7.23 per cent yoy

Gross NPAs declined to 14.84 per cent of gross advances as at March-end 2022 against 16.55 per cent as at March-end 2021. Net NPAs declined to 3.97 per cent of net NPAs against 5.77 per cent.

Total advances increased by 7.23 per cent yoy to stand at ₹1,89,712 crore as at March-end 2022. Within total advances, RAM (retail, agriculture and MSME) advances were up 5.90 per cent yoy and corporate advances rose 9.70 per cent.

Deposits were up 3.85 per cent yoy to stand at ₹3,42,692 crore as at March-end 2022. The proportion of low-cost current account, savings account (CASA) deposits increased to 50.58 per cent as at March-end 2022 against 49.24 per cent as at March-end 2021.

The Bank expects to grow its deposits and advances by 8-10 per cent and 10-12 per cent, respectively, in FY23. Further, it has set a target to bring down the percentage of global GNPAs and NNPAs to below 10 per cent and less than 3.50 per cent, respectively.

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Central bank of India to close 13% of its branches: Report

 

Central Bank of India, a state-owned commercial bank, plans to shut 13% of its branches to improve its financial health, which has been under pressure for several years, according to sources and a document seen by Reuters.

The bank is looking to reduce the number of branches by 600 by either shutting down or merging loss-making branches by the end of March 2023, according to the copy of a document reviewed by Reuters.

It is the most drastic step the lender has taken to improve its finances and will be followed by the sale of non-core assets such as real estate, said a government source who did not want to be named.

The closure of the branches has not been reported previously. The more than 100-year old lender currently has a network of 4,594 branches.

Central Bank along with a clutch of other lenders was placed under RBI's prompt corrective action (PCA) in 2017 after the regulator found some state-run lenders were in breach of its rules on regulatory capital, bad loans and leverage ratios.

Since then all the lenders except Central Bank have improved their financial health and come off RBI's PCA list.

The bank is struggling to come out of PCA of RBI due to poor performance on profit since 2017 and to utilise manpower in more efficient and effective manner," the document dated May 4 sent out by the headquarters to other branches and departments stated, detailing the rationale behind the move.

Central Bank of India did not immediately reply to emails and calls seeking comment

A bank under PCA faces greater scrutiny by the regulator and may face lending and deposit restrictions, branch expansion and hiring freezes and other limitations on borrowings.

The RBI introduced these norms at a time when Indian lenders were battling record levels of soured assets, prompting the RBI to tighten thresholds.

"Central bank of India's move is in line with the set strategy of lowering loss-making assets in its books," the government official said.

In the December quarter, the lender reported a profit of 2.82 billion Indian rupees ($37.1 million) versus 1.66 billion rupees in the previous year in the same quarter.

It gross non-performing assets (GNPA) ratio remains high compared with its peers however, standing at 15.16% as of the end of December.

The bank was placed under the PCA framework in June 2017 and in that quarter the lender had registered a loss of 7.50 billion rupees while its GNPA ratio was at 17.27%.

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IOB, Central Bank divestment on the fast-track

The Centre plans to accelerate the process of privatisation of the Indian Overseas Bank (IOB) and Central Bank of India after the two banks posted good quarterly results, finance ministry sources said. The government’s public policy think tank Niti Aayog has already proposed the names of these two PSBs to the core group of Secretaries on Disinvestment (CGD) for privatisation.

“We had to put a halt to the privatisation process in between because of the protests by bank associations and State elections. But now, after the banks registered positive results in the December quarter, it will gather steam. CGD is assessing the proposal submitted by Niti Aayog, which will then go to the Cabinet committee for final approval,” an official told this newspaper.

Another official pointed out that there is no provision for privatisation of banks in the Bank Nationalization Act. So, an amendment is needed in the Act to privatise the state-owned lenders. “A few amendments have been proposed to the Banking Regulation Act and Bank Nationalisation Act to facilitate the privatisation.

We are trying to make an attractive scheme related to employees’ compensation to avoid strikes,” he added. In the October-December quarter, Chennai-based IOB’s net profit doubled to Rs 454 crore against Rs 213 crore in the year-ago period. In the same period, Mumbai-based Central Bank of India registered a 69% increase in its net profit at Rs 279 crore.

More banks to be identified later

After the completion of the privatisation of IOB and CBI, the Centre will identify other banks for disinvestment in the coming years. The government wants only four large PSBs in the country.

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Central Bank of India Q3 Profit rises 69%

 

Central Bank of India on Friday reported 69 per cent jump in net profit at Rs 279 crore for the quarter ended December 2021 on the back of healthy growth in core income and fall in bad loan proportion. The bank had posted a net profit of Rs 165 crore in the same quarter a year ago.

Gross non-performing assets (NPAs) reduced to 15.16 per cent at end-December 2021, improving by 114 basis points from 16.30 per cent by the year-ago same period, it said.

Net NPAs reduced to 4.4 per cent from 4.73 per cent. However, the bank's provisions for bad loans and contingencies for the quarter rose to Rs 878.93 crore as against Rs 743.74 crore in October-December 2020-21.

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Central Bank of India net profit jumps 55% in Q2

Public sector Central Bank of India on Tuesday reported an over 55 percent jump in net profit at Rs 250 crore for the quarter ended September.

The lender had posted a net profit of Rs 161 crore during the same quarter of the previous fiscal.

However, total income of the bank during July-September period of 2021-22 was down at Rs 6,503.39 crore, as against Rs 6,762.36 crore in the year-ago period, it said in a regulatory filing.

Net interest income rose 5.99 percent to Rs 2,495 crore, as against Rs 2,354 crore earlier.

Net interest margin (NIM) improved from 3.21 percent to 3.36 percent on a year-on-year basis, registering an improvement of 15 basis points, it added.

On the asset quality front, net non-performing assets (NPAs or bad loans) reduced to 4.51 percent as of September 30, 2021, from 5.60 percent by end of the same month last year.

Gross NPAs moderated to 15.52 percent from 17.36 percent.

Also, the bank's cost of deposit declined to 3.84 percent from 4.45 percent for the reported quarter.

However, there was a slight uptick in provisions and contingencies for the quarter at Rs 1,048.52 crore, as against Rs 1,033.34 crore parked aside in the September 2020 quarter.

The state-owned lender said its slippage ratio stood at 1.45 percent as against 0.08 percent as there was a moratorium granted by RBI due to the COVID-19 pandemic. In the June 2021 quarter, it was 0.95 percent.

"Slippage ratio during the quarter increased due to slippage of two corporate accounts of Rs 1,150 crore. Had these accounts not slipped during the quarter then the slippage ratio for Q2FY22 would have been 0.67 percent," the bank said in a release.

Total business stood at Rs 5,12,094 crore as on September 30, 2021, compared to Rs 5,00,737 crore earlier, registering a growth of Rs 11,357 crore (2.27 percent) year-on-year.

Total deposits have increased by Rs 13,056 crore and stood at Rs 3,36,500 crore at the end of the quarter, from Rs 3,23,444 crore in the year-ago period, reflecting an increase of 4.04 percent, it added.

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Central Bank of India Q1 results: reports 53% jump in net profit

 

State-run Central Bank of India posted a 53 per cent jump year-on-year in its net profit to Rs 206 crore in the April-June quarter of this fiscal. The bank had reported a net profit of Rs 135 crore in April-June 2020. It had reported a loss of Rs 1,349 crore in the preceding quarter ended in March 2021.

Total income declined to Rs 6,245.54 crore in the first quarter of 2021-22 from Rs 6,726.68 crore in Q1FY21, the bank said in a regulatory filing.Net interest income remained almost flat at Rs 2,135 crore in the quarter against Rs 2,146 crore in the year-ago quarter.

Gross non-performing assets (NPAs or bad loans) fell to 15.92 per cent of the gross advances by end of June this year from 18.10 per cent by year ago same period, it said.Net NPAs improved to 5.09 per cent from 6.76 per cent.Provision coverage ratio improved to 84.28 per cent as of June 30, 2021 from 79.12 per cent.

The bank said the slippage ratio during the quarter increased to 0.95 per cent from 0.02 per cent in year ago quarter as moratorium was granted by the RBI due to Covid-19 pandemic in June 2020 quarter.

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Government may shortlist two PSU banks for privatization

 The Centre has shortlisted Central Bank of India (CBI) and Indian Overseas Bank (IOB) for divestment.The two state-run banks might see 51 percent sale in the first phase of disinvestment.

The government will amend the Banking Regulations Act, and some other banking laws for divestment, the news channel reported.

Following the news, shares of CBI and IOB surged 20 percent on June 21.

The weak financial metrics of lenders like CBI and IOB could lead to unexpected hurdles in the government's plan to privatise the lenders, banking analysts.

Both the IOB and CBI are currently under the Prompt Corrective Action (PCA) framework imposed by the Reserve Bank of India (RBI). Under the PCA framework, the central bank imposes certain business restrictions on lenders with weak financial metrics.

The Centre has set an ambitious divestment target of Rs 1.75 lakh crore for FY22.

The government's plans to sell its stakes in Air India, Bharat Petroleum Corporation (BPCL), Shipping Corporation of India and some other companies have been disrupted due to the COVID-19 pandemic

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Central Bank of India Q4 results: Lender's net loss narrows

 

State-owned Central Bank of India on Monday reported narrowing of its net loss to Rs 1,349.21 crore on a standalone basis in the last quarter of the fiscal ended March 2021. The bank had posted a net loss of Rs 1,529.07 crore in the same quarter of the preceding fiscal year. Sequentially, there was a net profit of Rs 165.41 crore in the December quarter of FY21.

Net profit (standalone) for the entire fiscal 2020-21 was down by 20.84 per cent to Rs 887.58 crore as against Rs 1,121.35 crore in 2019-20, Central Bank of India said in a regulatory filing.

Income (standalone) during Q4FY21 also fell to Rs 5,779.84 crore from Rs 6723.73 crore in Q4FY20.

For the full year, the income was down at Rs 25,897.44 crore as against Rs 27,199.29 crore in FY20, the bank said.

The asset quality of the state-owned lender showed improvement with the gross non-performing assets (NPAs) falling to 16.55 per cent of the gross advances by end of March 2021 as against 18.92 per cent by year-ago same period.

In absolute value, gross NPAs fell to Rs 29,276.96 crore from Rs 32,589.08 crore.

Net NPAs were also trimmed to 5.77 per cent (Rs 9,036.46 crore) from 7.63 per cent (Rs 11,534.46 crore).

Provisions for bad loans and contingencies during the reported quarter rose to Rs 3,130.33 crore from Rs 2,178.33 crore put aside for the year-ago quarter.

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