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Central Bank of India has continued to record net losses for eleventh straight quarter at Rs 1522.24 crore for the quarter ended June 2018 (Q1FY2019). The bank has posted strong 26% growth in the net interest income, but losses in the treasury segment and consistent provisioning pressure impacted the earning of the bank. The asset quality of the bank continued to remain under pressure with elevated fresh slippages of loans.
The bank has witnessed increase in net interest margin to 2.61% in Q1FY2019 from 2.32% in the previous quarter and 1.95% in the corresponding quarter last year. The credit-deposit ratio was was flat at 59.6%, while CASA deposit ratio of the bank improved to 42.7% end June 2018.
Asset quality under pressure: The asset quality of the bank remained under pressure with elevated fresh slippages of loan in Q1FY2019.
- Fresh slippages of advances were elevated at Rs 2937 crore in Q1FY2019 compared to Rs 7868 crore in the previous quarter.
- Recovery, upgradations and write-off together were lower at Rs 2290 crore in Q1FY2019.
- Restructured advance book declined to Rs 1233.92 crore at end June 2018 from Rs 1618.27 crore at end March 2018 and Rs 6632.38 crore at end June 2017.
- Stressed assets (NNPA and standard restructured advances) of the bank eased to 9.9% at end June 2018 compared to 10.7% a quarter ago and 14.0% a year ago.
| Asset Quality Indicators: Central Bank of India |
|
201806 |
201803 |
201712 |
201709 |
201706 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
38777.66 |
39130.70 |
32490.85 |
31641.15 |
31398.47 |
-1 |
24 |
| Net NPA (Rs Crore) |
16086.25 |
17377.87 |
15310.68 |
15899.74 |
17407.43 |
-7 |
-8 |
| % Gross NPA |
22.17 |
21.48 |
18.08 |
17.27 |
18.23 |
69 |
394 |
| % Net NPA |
10.58 |
11.10 |
9.45 |
9.53 |
11.04 |
-52 |
-46 |
| % Provision Coverage Ratio |
66.42 |
63.31 |
62.49 |
58.58 |
54.48 |
311 |
1194 |
| % CRAR - Basel III |
8.05 |
9.04 |
7.87 |
9.22 |
9.61 |
-99 |
-156 |
| % CRAR - Tier I Basel III |
6.05 |
7.01 |
5.87 |
7.04 |
7.47 |
-96 |
-142 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Flat business level: Business of the bank was flat at Rs 468534 crore at end June 2018 over June 2017. Deposits base was steady at Rs 293595 crore, while the advances moved up 2% to Rs 174939 crore at end June 2018. The credit-deposit ratio was nearly flat at 59.6% at end June 2018 from 60.2% a quarter ago and 59.8% a year ago.
CASA ratio improves: CASA ratio of the bank increased to 42.7% at end June 2018 compared with 39.5% at end June 2017. CASA deposits with the bank increased 8% to Rs 125429 crore, driven by 9% growth in the saving account deposits to Rs 111814 crore at end June 2018. Current deposit also rose 2% to Rs 13615 crore at end June 2018.
Bank has also been consistently shading high cost deposits to 0.3% at end June 2018 from 4.3% a year ago.
Retail loans driving credit growth: The growth of the advances book was mainly driven by retail advances rising 33% to Rs 48206 crore. The MSE credit also increased 9% to Rs 35045 crore. The agriculture credit was flat at Rs 37502 crore. On the other hand, the corporate credit book dipped 18% to Rs 54187 crore at end June 2018.
Network expansion: Bank has total branch network of 4668 branches and ATMs network of 4808 ATMs at end June 2018 down from 4716 branches and 5267 ATMs at end June 2017.
Book Value per share stood at Rs 50.9 per share at end June 2018. The adjusted book value (net of NNPA and 25% of restructured advances) was negative at Rs 11.7 per share at end June 2018.
Quarterly Performance:
NII up, as NIM improves: Interest income of the bank declined 8% to Rs 5691.87 crore in Q1FY2019, while interest expended dipped 18% to Rs 4013.69 crore. NII improved 26% to Rs 1678.18 crore in the quarter ended June 2018, as NIM of the bank improved to 2.61% in Q1FY2019 from 2.32% in the previous quarter and 1.95% in the corresponding quarter last year.
Core fee income rises: Other income of the bank dipped 68% to Rs 212.95 crore in the quarter ended June 2018, as the bank recorded treasury losses of Rs 264 crore in Q1FY2019. The recoveries in written off accounts fell 2% to Rs 121 crore in Q1FY2019. However, the core fee income of the bank improved 8% to Rs 318 crore, while the forex income jumped 52% to Rs 38 crore.
The net total income declined 5% to Rs 1891.13 crore in the quarter ended June 2018.
Expense ratio up: Operating expenses fell 2% to Rs 1507.52 crore, on the back of 4% decline in employee expenses to Rs 965.94 crore, while the other operating expenses rose 1% to Rs 541.58 crore. The expense ratio increased to 79.7% in the quarter under review from 77.4% in Q1FY2018.
Operating profit fell 15% to Rs 383.61 crore in Q1FY2019.
Provisions for NPAs and investment depreciation jumps: The provisions and contingencies jumped 118% to Rs 2768.22 crore, led by investment provisions rising 66% to Rs 502 crore in Q1FY2019 and loan losses provisions up 151% to Rs 2540 crore in Q1FY2019. The bank has written back of standard asset provisions worth Rs 138 Crore in Q1FY2019.
With the overall jump in provisions, the bank has recorded pre-tax losses of Rs 2384.61 crore in the quarter ended June 2018.
The bank has written back tax provisions of Rs 862.37 crore, helping to reduce net losses to Rs 1522.24 crore in the quarter ended June 2018.
Annual Financial Performance:
For the year ended March 2018 (FY2018), the bank has recorded net loss of Rs 5104.91 crore. The net interest income fell 1% to Rs 6517.00 crore, while non-interest income also dipped 9% to Rs 2622.35 crore in FY2018. The expense ratio increased to 66.8% in FY2018 compared to 64.1% in FY2017. The operating expenses rose 1% to Rs 6105.85 crore, while provision and contingencies zoomed 58% to Rs 10929.48 crore. The pre-tax losses came in at Rs 7895.98 crore in FY2018. The bank has written back tax provisions of 2791.07 crore, helping to reduce net loss to Rs 5104.91 crore in FY2018.
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