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Central Bank of India has continued to net loss for fourteenth straight quarter at Rs 2477.41 crore for the quarter ended March 2019 (Q4FY2019). The net interest income of the bank has increased 7%, while non-interest income also surged 71% in Q4FY2019. The business of the bank was stable, while bank has exhibited sharp increase in CASA deposit ratio to 46.2% end March 2019. However, the elevated level of provisions and bad loans addition impacted the bottomline of the bank in Q4FY2019. The asset quality of the bank has remained under pressure. The net interest margin (NIM) of the bank declined on sequential basis to 2.34% in Q4FY2019.
Asset quality under pressure on higher slippages: Bank continued to witness higher fresh slippages of advances, causing pressure on asset quality in Q3FY2019.
- Fresh slippages of advances were elevated at Rs 2324.89 crore in Q4FY2019 compared to Rs 2456 crore in the previous quarter.
- Recovery, upgradations and write-off together were lower at Rs 5301.53 crore in Q4FY2019.
| Asset Quality Indicators: Central Bank of India |
|
201903 |
201812 |
201809 |
201806 |
201803 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
32356.04 |
35332.68 |
37410.76 |
38777.66 |
38130.7 |
-8 |
-15 |
| Net NPA (Rs Crore) |
11333.24 |
15605.07 |
15794.15 |
16086.25 |
17377.87 |
-27 |
-35 |
| % Gross NPA |
19.29 |
20.64 |
21.48 |
22.17 |
21.48 |
-135 |
-219 |
| % Net NPA |
7.73 |
10.32 |
10.36 |
10.58 |
11.10 |
-259 |
-337 |
| % Provision Coverage Ratio |
76.86 |
69.52 |
67.74 |
66.42 |
63.31 |
734 |
1355 |
| % CRAR - Basel III |
9.61 |
9.34 |
8.71 |
8.05 |
9.04 |
27 |
57 |
| % CRAR - Tier I Basel III |
7.49 |
7.39 |
6.71 |
6.05 |
7.01 |
10 |
48 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Steady business: Business of the bank declined marginally by 1% yoy to Rs 467584 crore at end March 2019. Deposits grew 2% to Rs 299855 crore, while the advances declined 5% to Rs 167729 crore at end March 2019. The credit-deposit ratio declined to 55.9% at end March 2019 from 59.1% a quarter ago and 60.2% a year ago.
CASA ratio improves: CASA ratio of the bank increased to 46.2% at end March 2019 compared with 42.5% at end March 2018. CASA deposits with the bank increased 11% to Rs 138555 crore, driven by 11% growth in the saving account deposits to Rs 122139 crore at end March 2019. Current deposit also surged 12% to Rs 16416 crore at end March 2019.
Bank has also been consistently shading high cost deposits to 0.02% at end March 2019 from 0.3% a quarter ago and 0.3% a year ago.
Retail and agriculture loans driving credit growth: The growth of the advances book was mainly driven by retail advances rising 1% to Rs 48666 crore. The agriculture credit increased 16% to Rs 35655 crore. However, the MSE credit declined 9% to Rs 31037 crore, while the corporate credit book fell 19% to Rs 52371 crore at end March 2019.
Network expansion: Bank has total branch network of 4659 branches and ATMs network of 3966 ATMs at end March 2019 down from 4685 branches and 4886 ATMs at end March 2018.
Book Value per share stood at Rs 39.2 per share at end March 2019. The adjusted book value (net of NNPA) was Rs 11.2 per share at end March 2019.
Quarterly Performance:
NII up on low base: Interest income of the bank declined 3% to Rs 5476.82 crore in Q4FY2019, while interest expenses dipped 6% to Rs 3874.36 crore. NII rose 7% to Rs 1602.46 crore in the quarter ended March 2019, as NIM of the bank improved to 2.34% in Q4FY2019 from low base of 2.32% in the corresponding quarter last year.
Non-interest surge, core fee income rises: Other income of the bank increased 71% to Rs 1143.69 crore in the quarter ended March 2019, driven by 420% surge in treasury income to Rs 281 crore. Meanwhile, the core fee income of the bank improved 13% to Rs 472 crore and recoveries in written off accounts jumped 138% to Rs 354 crore. However, the forex income declined 26% to Rs 37 crore in Q4FY2019.
The net total income increased 27% to Rs 2746.15 crore in the quarter ended March 2019.
Expense ratio improves: Operating expenses declined 24% to Rs 1227.32 crore, on the back of 40% dip in employee expenses to Rs 545.35 crore, while the other operating expenses also fell 4% to Rs 681.97 crore. The expense ratio dipped to 44.7% in the quarter under review from 74.8% in Q4FY2018.
Operating profit improved 178% to Rs 1518.83 crore in Q4FY2019.
Provisions remain sharply elevated: The provisions and contingencies increased 19% to Rs 4733.82 crore, as the NPA provisions remains sharply higher at Rs 4564 crore, while the bank had to provide Rs 270 crore for investment depreciation in Q4FY2019 against write-back Rs 335 crore in Q4FY2018. The write back of standard asset provisions stood at Rs 155 crore.
With the increase in provisions, the pre-tax loss came in at Rs 3214.99 crore in the quarter ended March 2019.
The bank has written back tax provisions of Rs 737.58 crore, helping to reduce the net loss to Rs 2477.41 crore in the quarter ended March 2019.
Annual Financial Performance:
For the year ended March 2019 (FY2019), the bank has recorded 11% rise in net loss to Rs 5641.48 crore. The net interest income improved 4% to Rs 6772.18 crore, while non-interest income declined 8% to Rs 2412.94 crore in FY2019. The expense ratio declined to 62.7% in FY2019 compared to 66.8% in FY2018. The operating expenses declined 6% to Rs 5758.11 crore, while provision and contingencies increased 6% to Rs 11597.23 crore. The pre-tax loss came in at Rs 8170.22 crore in FY2019. The bank has written back tax provisions of Rs 2528.74 crore, while net loss came in at Rs 5641.48 crore in FY2019.
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