Central Bank of India conducted a conference call on 21 October 2023 to discuss its financial results for the quarter ended September 2023. MV Rao, MD and CEO of the bank addressed the call:

Highlights:

The bank has recorded highest quarterly net profit of Rs 605 crore the bank has also crossed the business milestone of Rs 6 lakh crore in end September 2023.

The deposits of the bank have increased by 8% and the advances have moved up 17% end September 2023.

The bank has exhibited an improvement in the provision coverage ratio to 92.54%.

The net interest income has increased by 10%, while the net interest margin has the moved up to 3.43% in Q2FY2024 from 3.12% in Q2 last year.

The return on asset has moved up to 0.62% and the return on equity to 12.31%.

The capital adequacy ratio was higher at 14.82% end September 2023.

The fresh slippages ratio was at 1.22%, while excluding 1 large corporate account the fresh slippage ratio was significantly lower at 0.3% in Q2FY2024.

Segment wise, the net NPA ratio for the retail segment was low at 0.73%, agriculture has also improved to 4.3%, MSME 2.76% and corporate was at 0.31% end September 2023.

The CASA deposit ratio of the bank remains better in the industry at 49%.

The bank expects the cost of deposits to peak in Q3FY2024.

About 69% of the branches of the bank are in semi urban and rural area, where the depositors are agnostic to changes in interest rates.

The bank aims to maintain the share of retail loan book at 65% and the corporate book at 35%.

The bank has improved credit to risk weight asset ratio to 61% from 65%.

The bank is targeting 10-12% business growth, 8 to 10% growth in deposits and 15% growth in advance for FY2024.

The bank aims to maintain RoA above 0.7% in FY2024.

The bank aims to reduce gross NPA ratio below 4.5% and the net and below 1.5%, net interest margin above 3% and provision coverage ratio at 93 to 95%.

The NPA in corporate account had exposure of Rs 2000 crore. The bank had already created standard asset provisions which have been reversed to create NPA provisions in Q2. The bank has created entire provisions on the loan accounts and there are good chances of recovery in the account.

The bank is targeting 20-22% growth in the retail loan book.