Central Bank Q3 net up 31.68 pc at Rs 403.52-crore

Written by: Pti
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Mumbai, Jan 31 (PTI) The State-owned Central Bank ofIndia today reported a 31.68 per cent increase in its netprofit for the December quarter at Rs 403.52-crore on the backof a whopping 96 per cent rise in the interest income.

The city-headquartered bank''s net profit for thecorresponding October-December period last year was Rs 306.44-crore. The net interest income for the reporting quarteralmost doubled to Rs 1,432-crore from Rs 730-crore a year-ago.

Central Bank, which is planning to come out with a Rs2,500-crore rights issue soon, was also able to widen its netinterest margin to 3.45 per cent from the 2.04 per cent in theyear-ago period.

However, poor conditions in the bond markets resultedin the bank''s non-interest income dipping to Rs 250-croreversus Rs 364-crore year-ago, Chairman and Managing Director,S Sridhar, told reporters here.

The trading profit was down 75.87 per cent to Rs 43-crore during the quarter, Sridhar said, maintaining that thebank has registered a jump in its commission income.

Central Bank''s fresh slippages also increased to Rs797-crore during the quarter from Rs 542-crore a year-agowhile the provisioning for bad and doubtful debts rose to Rs127-crore from Rs 16-crore in the corresponding period lastyear.

Sridhar said a single account of an agrotech companyresulted in the provisioning going up by Rs 77-crore and addedthat other banks also have an exposure to the account.

The bank''s credit growth stood at 28 per cent for thequarter as against a mere 4 per cent rise in overall deposits.


When asked about sustaining credit growth against such a skewed number, Sridhar said the bank has upped its creditdeposit ratio to over 70 per cent, consciously brought downits high-cost deposits and has also seen a spurt in thecheaper CASA (current and savings account) deposit ratio tonearly 35 per cent due to which it can keep lending.

Sridhar also said that the higher credit growth is dueto the base effect as in the last fiscal (FY 10), the bank hadobserved a maximum rise in credit during the last quarter.

The bank''s total capital adequacy stood at 11.76 percent as at December 31, 2010, while an infusion through therights issue will take it to over 13.5 per cent, a senior bankofficial said, adding, this capital should suffice for thebank''s operations for more than a year.

The yield on advances improved to 10.47 per centduring the reporting period versus 9.82 per cent while thecost of deposits came down to 5.68 per cent as against 6.10per cent in the year-ago period.

The bank, which has 3,656 branches and 912 automatedteller machines (ATMs), plans to increase the total number ofATMs to 2,000 by end-March, Sridhar said.

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