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Central Bank of India has continued to net loss for thirteenth straight quarter at Rs 718.23 crore for the quarter ended December 2018 (Q3FY2019). The net interest income of the bank has declined 8%, while non-interest income also fell 3% in Q3FY2019. The asset quality of the bank has remained under pressure, while the bank has exhibited decline in business volumes. The provisions of the bank remained sharply higher causing net losses for the bank. However, the bank has improved Net Interest Margin (NIM) on sequential basis to 2.74% in Q3FY2019. CASA deposit ratio of the bank further increased to 44.6% in Q3FY2019.
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 2456 crore in Q3FY2019 compared to Rs 2611 crore in the previous quarter.
- Recovery, upgradations and write-off together were higher at Rs 4534 crore in Q3FY2019.
- Fresh restructuring of advances stood at Rs 504.73 crore in the quarter ended December 2018. Restructured advance book increased to Rs 1459.41 crore at end December 2018 from Rs 999.11 crore at end September 2018, while declined from Rs 4257.07 crore at end December 2017.
- Stressed assets (NNPA and standard restructured advances) of the bank rose to 10.0% at end December 2018 compared to 9.6% a quarter ago, while eased from 10.9% a year ago.
| Asset Quality Indicators: Central Bank of India |
|
201812 |
201809 |
201806 |
201803 |
201712 |
Variation |
| QoQ |
YTD |
YoY |
| Gross NPA (Rs Crore) |
35332.68 |
37410.76 |
38777.66 |
39130.70 |
32490.85 |
-6 |
-10 |
9 |
| Net NPA (Rs Crore) |
15605.07 |
15794.15 |
16086.25 |
17377.87 |
15310.68 |
-1 |
-10 |
2 |
| % Gross NPA |
20.64 |
21.48 |
22.17 |
21.48 |
18.08 |
-84 |
-84 |
256 |
| % Net NPA |
10.32 |
10.36 |
10.58 |
11.10 |
9.45 |
-4 |
-78 |
87 |
| % Provision Coverage Ratio |
69.52 |
67.74 |
66.42 |
63.31 |
62.49 |
178 |
621 |
703 |
| % CRAR - Basel III |
9.34 |
8.71 |
8.05 |
9.04 |
7.87 |
63 |
30 |
147 |
| % CRAR - Tier I Basel III |
7.39 |
6.71 |
6.05 |
7.01 |
5.87 |
68 |
38 |
152 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Business volume declines: Business of the bank declined 2% yoy to Rs 466601 crore at end December 2018. Deposits were flat yoy at Rs 295419 crore, while the advances declined 5% to Rs 171182 crore at end December 2018. The credit-deposit ratio was nearly steady at 59.1% at end December 2018 from 58.9% a quarter ago and 60.8% a year ago.
CASA ratio improves: CASA ratio of the bank increased to 44.6% at end December 2018 compared with 40.7% at end December 2017. CASA deposits with the bank increased 10% to Rs 131876 crore, driven by 10% growth in the saving account deposits to Rs 117174 crore at end December 2018. Current deposit also surged 11% to Rs 14702 crore at end December 2018. Bank has reduced high cost deposits to 0.3% at end December 2018 from 0.3% a quarter ago and 0.5% a year ago.
Retail loans shows 4% growth: The growth of the advances book was mainly driven by retail advances rising 4% to Rs 48257 crore. The MSE credit declined 14% to Rs 33560 crore. The agriculture credit fell 4% to Rs 35304 crore, while the corporate credit book declined 6% to Rs 54061 crore at end December 2018.
Network expansion: Bank has total branch network of 4666 branches and ATMs network of 3887 ATMs at end December 2018 compared with 4715 branches and 4957 ATMs at end December 2017.
Book Value per share stood at Rs 47.3 per share at end December 2018. The adjusted book value (net of NNPA and 25% of restructured advances) was negative at Rs 6.5 per share at end December 2018.
Quarterly Performance:
NII declines with fall in loan book: Interest income of the bank declined 4% to Rs 5784.83 crore in Q3FY2019, while interest expended fell 2% to Rs 3968.78 crore. NII declined 8% to Rs 1816.05 crore in the quarter ended December 2018.
Non-interest declines, as core fee income dips: Other income of the bank fell 3% to Rs 544.34 crore in the quarter ended December 2018, as the core fee income of the bank dipped 14% to Rs 348 crore. The forex income also declined 3% to Rs 32 crore and recoveries in written off accounts dipped 14% to Rs 25 crore in Q3FY2019. However, treasury income surged 43% to Rs 139 crore in Q3FY2019.
The net total income declined 7% to Rs 2360.39 crore in the quarter ended December 2018.
Expense ratio up: Operating expenses declined 2% to Rs 1645.18 crore, on the back of 3% fall in employee expenses to Rs 1037.41 crore, while the other operating expenses were flat at Rs 607.77 crore. The expense ratio increased to 69.7% in the quarter under review from 65.9% in Q3FY2018.
Operating profit declined 17% to Rs 715.21 crore in Q3FY2019.
Provisions remain elevated: The bank has made provisions and contingencies of Rs 1811.85 crore, led by provisions of Rs 2077 crore for bad debt. However, the bank has written-back standard asset provisions of Rs 9 Crore, investment provisions of Rs 229 crore and other provisions of Rs 28 crore in Q3FY2019.
With the elevated provisions, the bank posted pre-tax losses of Rs 1096.64 crore in the quarter ended December 2018.
The bank has written back tax provisions of Rs 378.41 crore, helping to reduce net loss to Rs 718.23 crore in the quarter ended December 2018.
YTD Financial Performance:
For the nine-month ended December 2018 (9MFY2019), the bank has posted net loss of Rs 3164.08 crore. The net interest income improved 3% to Rs 5169.73 crore, while non-interest income dipped 35% to Rs 1269.25 crore in 9MFY2019. The expense ratio increased to 75.0% in 9MFY2019 compared to 68.6% in 9MFY2018. The operating expenses rose 1% to Rs 4831.32 crore, while provision and contingencies declined 1% to Rs 6562.90 crore. The pre-tax loss came in at Rs 4955.24 crore in 9MFY2019. The bank has written back tax provisions of Rs 1791.16 crore, helping to reduce net loss to Rs 3164.08 crore in 9MFY2019.
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