MUMBAI: Better asset quality and the resultant decline in provisioning coupled with better margins helped the public sector Central Bank of India to report a 110.53 per cent on-year jump in net income at Rs 880 crore for the June quarter.
In a statement issued on Thursday, the state-run lender, which has been a laggard for long on the asset quality side, said its gross NPAs improved to 4.54 per cent, an improvement of 41 bps (one basis point is a hundredth of a per cent) over 4.95 per cent a year ago.
At the same time, the net NPAs improved to 0.73 per cent, registering an improvement of 102 bps over 1.75 per cent. This has given the bank leeway to improve its provision coverage ratio as well which improved to 96.17, up 394 bps over 92.23.
The city-headquartered lender said its total business grew 8.97 per cent to Rs 6,35,564 crore in the reporting period. Of which deposits grew 5.93 per cent to Rs 3,84,949 crore and advances increased 13.99 per cent to Rs 2,50,615 crore. Of the total advance RAM (retail, agriculture & MSME) business grew 18.81 per cent.
Within deposits, the low-cost Casa deposits increased by Rs 8772 crore to Rs 1,88,863 crore, reflecting an annualized growth of 4.87 per cent or 49.19 per cent of total deposits.
This helped the bank improve its credit-to-deposit (CD) ratio to 65.27 registering an improvement of 452 bps.
The key profitability metric, net interest income (the difference between what a bank spends on deposits/funds and what it earns from lending), has increased to Rs 3,548 crore from Rs 3,176 crore in the corresponding quarter of June 2023.
Net interest margin (NIM) is the difference between what a bank earns from lending after deducing from deposits/funds cost) stood at 3.57 percent up from 3.43 percent in June 2023.
Total income (interest income plus non-interest income) for the quarter improved by 16.08 per cent from Rs 8,184 crore to Rs 9,500 crore. Of this net interest income (NII) grew 11.71 per cent to Rs 3,548 crore from Rs 3,176 crore.