 "Central Bank of India Q3 results: NPAT up 33.6%, signals small equity QIP")
Public sector lender Central Bank of India reported a 33.6 per cent year-on-year (Y-o-Y) rise in net profit to Rs 959 crore for the third quarter of FY25 (Q3FY25), driven by improved margins, higher net interest income (NII), and a reduction in provisions for bad loans.
Sequentially, the bank’s net profit increased by 5.04 per cent from Rs 913 crore in Q2FY25. Its stock closed 3.1 per cent higher at Rs 54.41 per share on the Bombay Stock Exchange (BSE).
The bank’s NII expanded 12.31 per cent Y-o-Y to Rs 3,540 crore in Q3FY25, compared to Rs 3,152 crore in the same quarter last year. The net interest margin (NIM) improved to 3.48 per cent in Q3FY25, up from 3.28 per cent in Q3FY24.
The lender’s provisions for non-performing assets (NPAs) declined to Rs 309.8 crore in Q3FY25 from Rs 714.4 crore in Q3FY24, reflecting improved asset quality.
Gross NPAs fell to 3.86 per cent at the end of December 2024, compared to 4.5 per cent a year ago. Net NPAs declined to 0.59 per cent from 1.27 per cent during the same period. The provision coverage ratio (PCR), including written-off accounts, improved to 96.54 per cent in December 2024, compared to 93.73 per cent a year earlier.
The bank’s capital adequacy ratio stood at 16.43 per cent, with Common Equity Tier-1 (CET-1) at 14.21 per cent as of December 2024.
During an analyst call, Managing Director and Chief Executive Officer M R Rao indicated that the bank might consider a small Qualified Institutional Placement (QIP) of equity shares in Q4FY25. “We have almost reached a stage where the organisation is generating sufficient capital internally to support future growth,” he said.
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The government of India held a 93.08 per cent stake in the bank as of December 2024.
The bank’s advances grew 13 per cent Y-o-Y to Rs 2.7 trillion in Q3FY25, while retail advances rose 16.18 per cent to Rs 79,927 crore. Total deposits increased 5.34 per cent Y-o-Y to Rs 3.97 trillion, with the share of low-cost current account and savings account (CASA) deposits rising to 49.18 per cent from 48.98 per cent a year ago.
The bank expects advances to grow 14-15 per cent Y-o-Y and deposits by 8-10 per cent by the end of FY25, executives stated during the call.