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Central Bank of India reported a 4 per cent drop in net profit for the fourth quarter of FY’2014 at Rs 162 crore due to higher provision for bad loans. The profit in the corresponding quarter a year ago was at Rs 169 crore.
Sequentially, the profit increased over 150 per cent from Rs 62 crore in the third quarter of FY-14.
"We had major slippages in sectors such as textile and cement which led to rise in NPA during the period,” said Rajeev Rishi, Chairman and Managing Director of the bank.
The bank’s gross non-performing assets (NPAs), or bad loans, as a percentage of total advances, rose to 6.27 per cent from 4.8 per cent in the January-March quarter last year. Net NPAs also worsened to 3.75 per cent from 2.90 per cent.
Provisions for bad loans increased to Rs 542 crore as compared with Rs 445 crore in the fourth quarter in FY13. “I believe things are likely to improve from now on. The worst is behind us," Rishi said.
Bank’s net interest income (interest earned less interest expended) increased 12 per cent to Rs 1,715 crore as against Rs 1,534 crore in Q4FY14. On the other hand, other income declined 7 per cent to Rs 593 crore (from Rs 636 crore).
During FY-2014, total advances grew 4 per cent to Rs 1.83 lakh crore (Rs 1.76 lakh crore as on March end 2013) driven by retail loan growth at 29 per cent.
Total deposits of the bank increased 6 per cent to Rs 2.40 lakh crore (from Rs 2.26 lakh crore in 2013).
"With the steps that bank has taken specially towards mobilising low cost deposits and focus towards retail banking, we see profit improving this fiscal," Rishi added.
Net interest margin during the quarter increased to 2.76 per cent from 2.68 per cent in the same quarter last year.
Full year results
For the full fiscal year, the bank made a net loss of Rs 1,263 crore compared with a net profit of Rs 1,015 crore in the previous financial year, due to higher provisioning.
Provisions for the year jumped 128 per cent to Rs 4,233 crore in FY14 compared with Rs 1,853 crore in FY13.
NIM improved to 2.73 per cent in FY 2013-14 from 2.65 per cent in FY 2012-13.
On Friday with the Sensex rally, the Central Bank of India shares had ended at Rs 53.80, higher by 2.77 per cent over its previous close on BSE.
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