Central Bank of India Q3 net profit soars 59% to Rs180 crore
MDT/PTI 31 January 2013

For the December quarter, Central Bank's total provisioning rose by 30% to Rs627.67 crore, of which Rs145 crore was due to the changes brought in by RBI, one of the reason why it could not touch the average net profit of Rs300 crore

Mumbai: State-run Central Bank of India (CBI) posted a robust 59% increase in net profit at Rs180 crore in the December quarter on a jump in core income but provisions for bad assets continued to rise, reports PTI.


The city-headquartered bank had posted a 72% slump in net profit at Rs113 crore in the year ago period, driven by deterioration in asset quality.


Announcing the numbers, Chairman and Managing Director MV Tanksale said the bank, whose restructured book stood at Rs22,182 crore, had to set aside Rs145 crore more this quarter due to a regulatory decision to increase provisioning on standard restructured assets by 0.75%.


"This was one of the main reasons why we did not touch the average Rs300 crore mark on net profit," he said.


For the quarter, its total provisioning rose by 30% to Rs627.67 crore, of which Rs145 crore was due to the changes brought in by RBI.


It witnessed fresh slippages of Rs1,212 crore, to take the total gross non-performing assets (NPAs) ratio to 5.64% as compared to the 3.69% the year ago.


"We wanted to improve on our NPA number, but it has not. Our efforts are on...I cannot say the worst is over for the bank," Tanksale said.


During the quarter, it added Rs1,603 crore to the restructured assets, Tanksale said.


It has fully provided for its Rs350 crore exposure to the bankrupt Kingfisher Airlines, Tanksale said, adding the bank wanted to continue with its relationship with the beleaguered carrier.


"The bankers want the airline to get Rs1,000 crore and resume operations, even if in a limited way. The Rs1,000 crore should be visible," he said, clarifying that there is no case for pressing the legal options trigger.


Its core net interest income was up 19.6% to Rs1,410 crore, while the non-interest income came in flat at Rs357 crore.


The net interest margin dropped marginally to 2.6% against 2.7% in the preceding quarter on a drop in the current and savings account (CASA) deposit ratio.


Tanksale said the bank is targeting to get the net interest margin (NIM) up to 2.75% by the end of the fiscal and though it is planning to shed high cost deposits, it will achieve a deposit growth of 13%-14% and a 16%-17% increase in advances for the fiscal, he said.

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