Central Bank of India’s net profit rose Rs 314 crore (96 crore in the corresponding period last year) in the second quarter of the current financial year, supported by a substantial growth in other income.
However, the bank’s net interest income (NII) fell by 11 per cent. Net interest margins also came down as lending rates fell faster than deposit rates. Yield on advances fell to 9.92 per cent (10.53 per cent) and cost of deposits came down to 6.54 per cent (6.86 per cent).
Mr Arun Kaul, Executive Director,said, “We invested our surplus funds in liquid schemes of mutual funds. Though the expenses were booked under interest expenses, the income was booked under other income. This reduced the NII”.
The share of current and savings account deposits (CASA) to total deposits has also come down. Even though credit growth in the first half of the quarter was low, the bank is confident of achieving more than the RBI’s revised projection of 18 per cent credit growth. The bank is expecting more credit offtake as part of the Rabi season demand. Senior officials opine that disbursement to corporate will increase as they avail of already approved limits.
Slippages in the quarter were at Rs 316 crore and NPA provision coverage ratio was at 74.28 per cent.