Central Bank of India reported a 21% rise in net profit to ₹1,469 crore for the September quarter, driven by strong credit growth. While asset quality improved significantly, investors may want to track the slower deposit growth compared to loans and the dip in the CASA ratio, which could indicate future pressure on funding costs.
Central Bank of India posted a net profit of ₹1,469 crore for the September quarter, marking a 21.1% increase from the same period last year. This growth was primarily supported by a 26.3% rise in net interest income, which reached ₹4,146 crore. The bank also reported an expansion in its net interest margin to 3.01%, up from 2.89% in the previous year, suggesting that the lender managed its interest rate spreads effectively despite the highly competitive environment for deposits in the banking sector.
A significant driver of this performance was a sharp increase in lending activities. The bank’s global advances climbed by 29.8% to ₹3.81 lakh crore. A large part of this demand was driven by the retail, agriculture, and MSME sectors, which collectively saw a 21.1% year-on-year rise. This rapid expansion in the loan book helped the bank grow its interest-earning assets significantly.
However, there is a growing gap between the pace of lending and the pace of deposit collection. While loans grew by nearly 30%, domestic deposits grew by a more moderate 14.4% to reach ₹5.09 lakh crore. This imbalance is a key monitorable for investors. Furthermore, the bank’s CASA ratio—which measures the proportion of deposits held in cheaper current and savings accounts—softened to 44.65% from 46.83%. A declining CASA ratio generally indicates that a bank may need to rely more on costlier term deposits to fund its credit growth, which could potentially pressure profit margins in the coming quarters.
On the asset quality front, the bank showed notable improvement. Gross non-performing assets dropped to 2.39% from 3.01% in the prior year, while net NPAs declined to 0.31%. This reduction indicates a cleaner balance sheet, supported by enhanced recovery mechanisms. The bank also maintained a conservative stance by increasing its provision coverage ratio to 97.16%.
Looking ahead, the bank maintains a comfortable capital adequacy ratio of 17.68%, which provides a solid buffer for future operations. The primary focus for management will be to sustain this aggressive credit growth while improving deposit mobilization. Investors will likely track whether the bank can continue to optimize its cost-to-income ratio—currently at 58.95%—while navigating the broader sector challenge of rising deposit costs and intense competition for customer savings.