In an impressive financial performance for the quarter ending September 30, 2024, Central Bank of India one of India’s leading banks reported remarkable growth across several key metrics, demonstrating a robust recovery and expansion despite challenging economic conditions. The bank’s financial results, released on October 17, 2024, highlight significant year-on-year (Y-o-Y) improvements in profitability, business volume, and operational efficiency.
Solid Growth in Business and Deposits
The bank’s total business saw a commendable growth of 7.07%, reaching ₹6,44,858 crore as of September 30, 2024, compared to ₹6,02,284 crore in the same quarter last year. Total deposits increased by 5.57% year-on-year, totaling ₹3,91,914 crore, up from ₹3,71,252 crore. This growth was driven by an increase in CASA (Current Account Savings Account) deposits, which surged by ₹8,432 crore, reflecting a Y-o-Y growth of 4.61%, representing 48.93% of the bank’s total deposits.
Advances and Credit Growth
The bank’s gross advances also recorded a strong 9.48% increase, reaching ₹2,52,944 crore as compared to ₹2,31,032 crore in the same period last year. The bank’s credit-to-deposit (CD) ratio improved by 228 basis points (bps) to 64.71%, indicating better utilization of its deposit base to expand lending.
Profitability Soars
One of the highlights of the bank’s financial results was the sharp rise in profitability. The bank’s net profit surged by a staggering 50.91%, reaching ₹913 crore in Q2 FY25 compared to ₹605 crore in the same quarter of the previous year. The net interest income (NII) also rose by 12.62% year-on-year, standing at ₹3,410 crore, reflecting the bank’s improved interest margin management.
The net interest margin (NIM) stood at 3.44%, up from 3.29% a year ago, further bolstering profitability. This increase in NIM reflects the bank’s effective cost management and strong lending performance.
Asset Quality Improves
The bank demonstrated improved asset quality, with its gross non-performing assets (NPA) ratio improving to 4.59%, a slight improvement from 4.62% in the previous year. The net NPA showed a more substantial improvement, reducing to 0.69%, down from 1.64% a year ago. These improvements highlight the bank’s enhanced risk management and efficient recovery strategies.
In addition, the provision coverage ratio (PCR) increased significantly by 377 bps, reaching 96.31%, further strengthening the bank’s financial stability and ability to handle potential future risks.
Operational Efficiency and Employee Productivity
The bank’s operating profit saw an impressive growth of 41.50%, reaching ₹2,165 crore, up from ₹1,530 crore in the previous year. This robust increase in operational profitability was driven by higher interest income and prudent cost management.
The bank also saw an improvement in employee productivity, with business per employee rising to ₹19.02 crore, up from ₹18.60 crore in the corresponding period last year. This reflects the bank’s focus on efficiency and leveraging its workforce to drive growth.
Capital Adequacy and Branch Expansion
The bank’s capital adequacy ratio (CRAR) under the Basel III norms improved to 16.27%, up from 14.82% a year ago, with Tier I capital contributing 14.01%, indicating a solid capital buffer to support future growth. This improved capital position enhances the bank’s ability to absorb potential financial shocks and expand its business.
The bank continued to strengthen its presence across India, with a network of 4,528 branches, of which 65.26% are in rural and semi-urban areas, underscoring its commitment to financial inclusion. It also operates 4,085 ATMs and 11,949 Business Correspondent (BC) Points, providing a total of 20,562 touchpoints as of September 30, 2024.
Sectoral Growth and Future Outlook
In addition to its overall business growth, the bank’s focus on Retail, Agriculture, and MSME (RAM) sectors saw significant progress, with RAM business growing by 19.95%. Notably, retail loans grew by 15.48%, agriculture loans by 17.34%, and MSME loans by an impressive 29.45%, reflecting the bank’s strong foothold in key priority sectors.
Looking ahead, the bank appears well-positioned to sustain its growth momentum, supported by a strong capital base, improving asset quality, and continued focus on high-growth sectors like MSMEs and retail banking.
Conclusion
In summary, the bank’s financial performance for Q2 FY25 showcases strong growth across multiple parameters, including business expansion, profitability, asset quality, and operational efficiency. These results reflect the bank’s strategic focus on improving operational metrics, optimizing cost structures, and expanding its presence in key growth areas, positioning it well for sustained success in the coming quarters.
