Central Bank of India has reported a nine-fold rise in net profit at ₹192 crore in the April-June quarter compared with ₹22 crore in the year-ago period.

Profitability of the public sector bank was aided by an 18 per cent rise in net interest income at ₹1,821.47 crore (₹1,538.02 crore) and improvement in net interest margins to 2.87 per cent from 2.68 per cent in the same quarter last year.

“Our net profit has moved up continuously for the past three quarters based on profitability parameters of higher NIMs, yield on advances and lower cost of deposits,” said Rajeev Rishi, Chairman and Managing Director. During the quarter, total provisions declined 34 per cent to ₹645 crore (₹983 crore), including provisions of ₹8 crore towards unhedged foreign currency exposure.

The provision for unhedged foreign currency exposure is expected at ₹32 crore for the full-year.

Year-on-year the public sector bank saw a 9 per cent increase in its gross non-performing assets (NPA) to ₹11,449 crore (₹10,529 crore).

While the Gross NPA ratio rose to 6.15 per cent (6.03 per cent), the net NPA ratio improved to 3.62 per cent (3.85 per cent).

“While we see the stress in asset quality to continue, our recovery from bad loans seems to be paying off and our gross NPAs will be reduced to 5.61 per cent as estimated,” the chairman said.

As on June 30, 2014, total advances grew 7 per cent at ₹1.86 lakh crore, while deposits increased slower at 4 per cent to ₹2.40 lakh crore, both driven by the retail segment.

Capital raising He added that the bank will require ₹2,000 crore for the fiscal year 2015 to support growth.

“Out of this, we have requested ₹581 crore from LIC (Life Insurance Corporation) and we have already received approval from the Government and Reserve Bank of India,” Rishi said.

The preferential allotment of shares to LIC will bring down the Government holding in the bank to 84 per cent from 88 per cent.

Central Bank of India is also likely to call bids next week to sell stake in Infrastructure Leasing and Financial Services Ltd (IL&FS) in order to shore up its capital.

On Friday, the bank’s scrip ended at ₹66.95 a share, down by 3.11 per cent over its previous close.

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