Central Bank Q2 net up 35% on higher advances
Mumbai: Central Bank of India Tuesday reported 35.25 percent jump in net profit to Rs 330 crore in the second quarter ended September 30 on the back of rise in advances even as the state-run lender's bad assets almost doubled.
Total income rose around 9 percent to Rs 5,681 crore in the July-September period from Rs 5,234 crore in the year-ago period.
During the quarter, the company's net interest income rose marginally by 1.29 percent to Rs 1,397 crore and net interest margin (NIM) stood at 2.68 percent.
"The NIM is maintainable at 2.7 percent in the current financial year," Central Bank of India Chairman and Managing Director Mohan V Tanksale told reporters here.
On the advances front, the bank witnessed a 17 rise in credit growth to Rs 1.53 trillion, while deposits growth was subdued at 8.10 percent to Rs 2 trillion during the quarter.
"We have been shedding bulk deposits to improve the margins and hope to bring it down to 25 percent of the total deposits from the present 27 percent by the end of the fiscal," Tanksale said.
"The bank had restructured assets worth Rs 1,049 crore in the second quarter," Tanksale said, adding around Rs 3,000 crore may come up for recast in the coming quarters.
However, the city-based bank saw deterioration in its asset quality with rise in both gross as well as net NPA numbers. Gross NPA nearly doubled to 5.54 percent from 2.94 percent and net NPA rose to 3.80 percent from 1.37 percent a year ago, Tanksale said.
Gross NPA and net NPA numbers stood at 4.87 percent and 3.22 percent, respectively, in the first quarter. Accordingly, the bank had to set aside Rs 492 crore as provisioning for bad assets, against Rs 392 crore in the year ago period.
Higher provisions and advances had its impact on the capital adequacy ratio of the bank which stood at 11.51 percent as against 12.76 percent reported a year ago.
"We have sought around Rs 2,500 crore from the government this fiscal. We also plan to raise money through qualified institutional placement in the fourth quarter to support our business growth," Tanksale said.