The Hindu Business Line : Central Bank Q3 net rises 50% at Rs 201 cr

Mumbai, Jan. 24 Central Bank of India has reported a 50 per cent growth in Q3 net profit at Rs 201 crore, against Rs 134 crore in the corresponding quarter of the previous year.

The jump in net profit was mainly due to reversion of provisioning, higher trading profits, and recovery from written-off accounts, said a senior official from the bank.

Provisions and contingencies fell from Rs 97 crore to a negative Rs 12 crore during the same period. Other income rose 71 per cent to Rs 183 crore, against Rs 107 crore in the previous year. Percentage of net non performing assets to net advances declined to 1.22 per cent (1.81)

The bank’s net interest margin, however, contracted to 2.86 per cent, against 3.18 per cent in the previous year. Net interest income also declined by 8.41 per cent at Rs 544 crore against Rs 594 crore in the year-ago-period.

Deposits, advances

Ms H.A. Daruwalla, Chairman and Managing Director, Central Bank of India, said that the cost of deposits had increased while the credit offtake as well as the yield on advances did not rise as per expectations

Cost of deposits increased to 6.3 per cent from 5.06 per cent, while the yield on advances rose to 9.64 per cent, from 8.52 per cent.

Total deposits increased 29 per cent to Rs 97,063 crore as on December 31, 2007 while gross advances increased 27 per cent to Rs 58,909 crore

“We will be concentrating on SME, agriculture and retail credit. We will also be focusing on fee-based income,” Ms Daruwalla said.

The bank has set a target of 25 per cent growth in deposits and 22 per cent rise in advances.

The banks’ capital adequacy ratio stood at 11.63 per cent in December 2007, slightly higher than the previous year’s 11.5 per cent.

Tier-II capital

Ms Daruwalla said the bank planned to raise Rs 455 crore-Rs 500 crore tier-II capital through subordinated debt.

The bank is also planning a succession scheme under which Central Bank’s officers can appear for examinations and promote themselves from Scale II to Scale IV and Scale III to Scale V, respectively.

The shares of Central Bank closed at Rs 102.35, 3.72 per cent lower than the previous close at Rs 106.30.

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