MUMBAI: State-owned Central Bank of India’s fourth quarter (January-March) net profit fell nearly 4% year-on-year to Rs 162 crore, driven by higher provisions against bad loans.
For the entire 2013-14, the bank reported a loss of Rs. 1,262.84 crore, compared with a profit of Rs. 1,014.96 crore in the previous financial year.
Provisions against non-performing assets or bad loans surged 54% y-o-y to Rs 653 crore during the three-month period.
“The worst is behind us,” said Rajeev Rishi, chairman and executive director, Central Bank of India. “Things are likely to improve in terms of profitability. Next two quarters we expect a rise in net profit. Through mobilisation of CASA and focus on retail we will improve our performance.”
During October-December quarter last year, the bank’s net profit dipped 66% y-o-y of to just Rs 62 crore. In the preceding quarter (July-September), the lender posted a net loss of Rs 1,509 crore y-o-y.
“The worst is over for bad loans,” Rishi had said during that time. “It will not be deep in red next quarter. We hope to come out profitable next year (FY15). Some loan accounts are expected to be upgraded. Loans are likely to grow at 14.50% for the full year.”
The bank ended up the full year (FY14) expanding its loans by a meager 4% y-o-y to Rs 1.83 lakh crore while deposits grew 6% to Rs 2.40 lakh crore. Net interest income or the difference between interest earned and paid out, rose 13% to Rs 6,493 crore.
The bank plans to raise about Rs 2,000 crore via qualified institutional placement (QIP) between July and December.
Since April 1, Central Bank of IndiaBSE -1.02 % shares rose 8.60% compared with more than 9% jump in the broader index BSE Bankex. The bank has been battling with rising pile of bad loans along with consistent poor performance, which in turn, has reduced its creditworthiness in the capital market.
Rating companies CrisilBSE 2.00 % and ICRABSE 0.33 % had downgraded its tier-II bond issues by one notch to AA from AA+.