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Central Bank of India (CBoI) reported a 55 per cent year-on-year (yoy) rise in its second quarter net profit at ₹250 crore against ₹161 crore in the year ago period, buoyed by lower loan loss provisions, write-back in provisions for standard assets, among others.
The public sector bank’s net interest income (difference between interest earned and interest expended) was up about 6 per cent y-o-y to ₹2,495 crore (₹2,354 crore in the year ago period).
Total non-interest income, comprising fee-based income, treasury income and other receipts edged up 1.55 per cent y-o-y to ₹720 crore (₹709 crore).
Loan loss provisions declined 56 per cent y-o-y to ₹311 crore (₹707 crore). The bank received a write-back of ₹394 crore from provisions it made towards standard assets (against ₹33 crore provision it had made under this head). Income tax provision was also lower at ₹103 crore (₹193 crore).
Slippages
Fresh slippages were higher at ₹2,104 crore (₹1,281 crore in the first quarter). Reduction in non-performing assets (NPAs), including via upgradation, recovery (including sale to asset reconstruction company), regular write-off, stood at ₹2,781 crore (₹2,790 crore).
Gross NPAs improved to 15.52 per cent of gross advances as on September-end 2021 against 15.92 per cent as on June-end 2021. Net NPAs also improved to 4.51 per cent of net advances as against 5.09 per cent.
The bank seems to be closer to being brought out of the Reserve Bank of India’s prompt corrective action (PCA) framework as it is no longer in breach of any of the four risk thresholds (capital, asset quality, profitability and leverage), going by the numbers in the analyst presentation.
Total advances declined about 1 per cent y-o-y to ₹1,75,594 crore. The lender said it had done a technical write-off (two) of advances of ₹4,810 crore during quarter-ended March 2021. If this was not done, then figure of advances as on September-end 2021 would have been ₹1,80,404 crore, with y-o-y growth of 1.75 per cent.
Total deposits increased by 4 per cent y-o-y to ₹3,36,500 crore. The share of low-cost CASA deposits increased to 49.79 per cent of total deposits from 47.72 per cent in the year ago period.
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