Central Bank of India posts a staggering 50% surge in profits for Q2 FY 24-25

Central Bank of India has posted impressive financial results for the second quarter of FY 24-25, with a remarkable 50.91% jump in net profit, reaching ₹913 crore compared to ₹605 crore in Q2 FY 23-24. This outstanding performance is being hailed as one of the strongest quarters for the bank in recent years, driven by strong deposit growth, improved credit quality, and a sharp rise in its net interest income. Investors are now closely eyeing the bank’s trajectory as its profitability continues to scale new heights.

The bank’s total business reached ₹644,858 crore, marking a year-on-year growth of 7.07%. Its total deposits also rose by 5.57% to ₹391,914 crore, while gross advances surged by 9.48% to ₹252,944 crore. Retail, agriculture, and MSME (RAM) sectors saw impressive growth rates of 15.48%, 17.34%, and 29.45%, respectively. The growth across these critical areas highlights the bank’s resilience amid challenging economic conditions.

Key financial metrics have also shown remarkable improvement. Central Bank of India’s Gross NPA reduced to 4.59%, while its Net NPA dropped sharply to 0.69%, underscoring the bank’s prudent approach to risk management. Additionally, the provision coverage ratio soared to 96.31%, offering further reassurance to stakeholders. The bank’s capital adequacy ratio under the Basel III norms also improved to 16.27%, compared to 14.82% a year ago.

For the September quarter, the bank’s total income surged by 17.08% year-on-year to ₹9,849 crore, while its net interest income (NII) jumped by 12.62% to ₹3,410 crore. The bank’s net interest margin (NIM) rose to 3.44%, compared to 3.29% in the previous year, pointing to better efficiency and profitability. This consistent rise in NII and NIM showcases the bank’s ability to capitalise on higher lending rates, while also managing its cost of funds effectively.

An industry analyst remarked that Central Bank of India’s performance is a testament to its strategic initiatives and strong operational execution. The bank’s focus on high-margin sectors like retail and MSME, along with its successful efforts in reducing bad loans, have played a pivotal role in its recent success. The analyst added that this performance is likely to build investor confidence in the bank’s long-term outlook.

With the improved Return on Assets (ROA) of 0.85% and a robust Return on Equity (ROE) of 12.76%, the bank has proven its ability to generate value for shareholders. Its stock performance has been steadily climbing, reflecting this growth. As the markets digest this impressive performance, Central Bank of India is well-positioned for further gains in the coming quarters.

A financial expert highlighted the impressive reduction in NPAs as a critical driver of Central Bank of India’s financial success. They explained that the bank’s strengthened balance sheet and prudent provisioning reflect a conscious effort to mitigate risks while ensuring profitability. The expert also noted that growth in RAM sectors demonstrates the bank’s commitment to expanding its lending portfolio in critical areas of the economy, further contributing to its robust quarterly results.