Mumbai: Central Bank of India today reported net profit of Rs 103 crore in the September quarter on lower provisioning and improvement in margins, as against a whopping Rs 1,509 crore net loss a year ago.
"A year ago our NPAs were very high for which the provision made was also high. But this year, with the decline in NPAs, the provision has also come down," Chairman and Managing Director of the state-owned bank, Rajeev Rishi told reporters here.
The bank made a provision of Rs 703 crore in the second quarter of 2014-15 fiscal for bad loans or non-performing assets, which included restructured assets, as against Rs 1,841 crore made in the year-ago period.
Total provision and contingency stood at Rs 743 crore as against Rs 2,051 crore in the same period.
Provision coverage ratio in Q2, 2014-15 was 55.02 percent as against Rs 49.98 percent last year.
Net interest margins improved to 2.85 percent from 2.45 percent.
"We have consciously decided to shed our high cost deposits to improve our net interest margins," Central Bank's Executive Director R K Goyal said.
Its high cost deposits stood at Rs 40,546 crore, down 20 percent from Rs 50,807 crore in the year-ago period.
The bank's asset quality improved in the quarter with gross NPAs rising to 6.14 percent from 6.47 percent, while net NPAs declined to 3.38 percent from 3.77 percent.
Rishi said the bank is targeting to contain gross NPA level at 5.61 percent, and net NPAs at 3.08 percent.
Fresh slippages stood at Rs 1,704 crore as against Rs 2,570 crore in the year-ago quarter. It wrote off Rs 88 crore of loans and upgrade stood at Rs 1,119 crore. Fresh loan recasts stood at Rs 1,576 crore.
The bank has a restructuring pipeline of Rs 1,500 crore over the next two quarters.
Its interest income also rose 12.95 percent to Rs 6,618 crore from Rs 5,859 crore in the same period last year.
Total business jumped by 6.05 percent to Rs 4,33,808 crore from Rs 4,09,041 crore. Deposits grew 7.41 percent to Rs 2,47,489 crore from Rs 2,30,413 crore and advances were up by 4.31 percent to Rs 1,86,319 crore as against Rs 1,78,628 crore last year.
The bank is aiming at a deposit growth of 14.47 percent and advances growth of 9.92 percent this year.
