Central Bank Q1 net slides 94% on higher provisions

Moneycontrol Bureau

State-owned lender Central Bank of India disappointed the street with the first quarter (April-June) net profit plunging 94 percent year-on-year to Rs 22 crore on higher provisions. With this, M V Tanksale, who had joined the bank as on October, 2011; as the chairman and managing director, presented his last quarterly results before he retires by July.

During the quarter, net interest income or the difference between interest earned and paid out, increased 12 percent y-o-y to Rs 1,538 crore . The bank earned a tax refund of Rs 4.62 crore. Without this component, the net profit would have slid 95 percent y-o-y to 17.31 crore.

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Provisions and contingencies jumped 178.55 percent year-on-year (up 123 percent sequentially) to Rs 983.3 crore during the quarter.

Gross non-performing asset (NPA) ratio rose to 6.03 percent as against 4.87 percent a year back. Net NPA stood at 3.85 percent versus 3.22 percent  during the same period.

The bank's gross net performing asset (NPA) ratio stood at 4.83 percent in Jan-March, 2011-12 and net NPA ratio was 3.10 percent during the same time. Tanksale had presented his second quarter results in O4, FY12.

In absolute terms, gross NPAs spiked more than 40 percent to Rs 10,530 crore while net NPAs shot up 34 percent to Rs 6,527 crore.

Central Bank's net interest margin was unchanged at 2.68 percent during June quarter Q-o-Q.

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The Central Bank of India shares lost 3.8 percent to close at Rs 62.05 on Wednesday. Investors shunned bank stocks after RBI measures to curb rupee volatility.

saikat.das@network18online.com