Central Bank net zooms 175%

Central Bank of India on Monday reported a 174.65 per cent rise in net profit to Rs 171.68 crore during January-March compared to Rs 62.51 crore in the same period of the previous year.

This comes on the back of 53.3 per cent growth in net interest income to Rs 664 crore. The Mumbai-based lender’s bottom line was also boosted by sale of non-performing assets (NPAs) worth Rs 200 crore to asset re-construction companies.

The bank was also able to significantly improve asset quality parameters, with its net NPA ratio coming down to 0.69 per cent as on March 31, as compared to 1.24 per cent in the year-ago period. In absolute terms, net NPAs came down to Rs 727 crore from Rs 1,063 crore.

The gross NPA ratio also came down to 2.29 per cent from 2.67 per cent. Gross NPAs, however, went up in absolute terms from Rs 2,316 to Rs 2,457 crore.

The net interest margin (NIM) of the bank continues to do well — 1.86 per cent during the fourth quarter as compared to 1.85 per cent in the third quarter.

“The overall reduction in cost of funds was not as we had expected,” said Chairman and Managing Director S Sridhar. The bank recorded 90 basis points decrease in cost of funds, though Sridhar expected the fall to be 50 basis points. However, for the current financial year, the bank is looking at an NIM of 2.25 per cent.

Sridhar said the bank had applied to the government for infusing Rs 2,000 crore capital. “The World Bank has committed $3.2 billion for capitalisation of public sector banks in India. We have sought Rs 2,000 crore for our bank out of that fund,” Sridhar said.

The government infused Rs 450 crore from its budgetary resources in March and another Rs 250 crore is expected in May. The bank’s capital adequacy ratio, at 12.24 per cent, is well above the regulatory requirement of 9 per cent. The government funds will help the bank have a Tier-I capital of more than 8 per cent.

Tier-I capital of the bank was 6.84 per cent as on March 31, as against the regulatory requirement of 6 per cent. Regarding business projections of the current financial year, Sridhar said the bank was aiming for 25 per cent growth in both loans and deposits.