Central Bank of India conducted a conference call on 29 April 2023 to discuss its financial results for the quarter ended March 2023. MV Rao, MD and CEO of the bank addressed the call:

Highlights:

Business of the bank has increased by 8.9% driven by 14.8% jump in the advance and 4.8% rise in the deposits. The bank has improved CASA deposit ratio to 50.39%.

Within, the loan book the share of retail agriculture and MSME loans increased to 66% end March 2023.

Net interest margin of the bank has improved to 3.65% in FY2023.

The bank has reduced gross NPA ratio to 8.44% and net NPA ratio to 1.77%. The provision coverage ratio has improved to 92.48%.

The credit cost stood at 0.83% in FY2023. The fresh slippage ratio declined to 1.91%.

The return on asset stands at 0.43% and cost income ratio at 56.35%

The business of model of the bank will continue to be same for FY2024. The bank would maintain the share of RAM Loan at 65% +/- 5%.

The co-lending side has turned out well and will continue to be the major contributor to the assets growth.

Bank will try to maintain Casa deposit ratio above 50% in FY2024.

The liquidity position of the bank is ample and it does not require to raise resources through issuance of CDs. The LCR stands at 285% end March 2023.

The business of the banks stands at Rs 5.77 lakh crore with deposits at Rs 3.59 lakh crore and advances at Rs 2.17 lakh crore end March 2023.

With 100% provisions for some bad loans, the bank expects to reduce gross NPA ratio below 5.5% in FY2024 without factoring in transfer of some stressed assets to bad bank.

The bank is targeting loan growth of 12 to 14% for FY2024. The bank expects to maintain net interest margin above 3.5% in FY2024 with the strong liquidity position and CASA ratio.

The bank is expecting income tax rate of 26-27% going forward.

The bank has tied up with 14 to 15 NBFCs for different products. This year the focus will be on niche products. The co lending book stands at Rs 6303 crore.

The digital budget of the banks stands at Rs 200 crore.

The bank has passed on lending rate hike of 175 bps against rate hike of 250 bps.

The bank has created Rs 1550 crore of contingency provisions in FY2023 with Rs 300 to 350 crore in Q4FY2023.

The bank is targeting return on asset of over 0.75% for FY 2024. The credit cost is expected to be below 1% and the cost income ratio is expected to be in the range of 53-55% for FY2024. In FY2025, the cost income ratio is expected to be below 50%.

The bank expects the fee income from sale of PSLCs to decline in FY2024, as the scope of priority sector lending has been expanded.

The customer base of the bank stands at 8.1 crore end March 2023.