Central Bank of India

Central Bank of India reported a strong Q3 FY26, with total business growing by 15.77% to INR 7.74 lakh crore. Gross advances increased by 19.48% year-on-year to INR 3,23,531 crore, driven by 17.89% growth in RAM (Retail, Agriculture, MSME) to INR 2,23,000 crore and 23.18% growth in corporate advances to INR 1,00,365 crore. The bank attributes this growth to strategic outreach programs for RAM and weekly credit approval meetings for corporate lending, with INR 1,17,000 crore sanctioned by head office committees this year.

The bank achieved an all-time high net profit of INR 1,263 crore, marking a 31.70% increase. Return on Assets (ROA) stood at 1.01%, and Return on Equity (ROE) improved by 151 basis points to 14.47%. This strong performance was supported by a 12.62% increase in total income to INR 10,968 crore, despite some pressure on Net Interest Margin (NIM) at 2.96% and Cost-to-Income ratio at 57.84%.

Asset quality showed significant improvement, with Gross NPA reducing by 116 basis points to 2.70% and Net NPA improving by 14 basis points to 0.45%. The Provision Coverage Ratio (PCR) remains robust at 96.69%. The bank proactively made provisions of INR 375 crore for the upcoming ECL transition and an additional INR 150 crore for the revised Labor Code, demonstrating a cautious approach to future liabilities. Slippage during Q3 was contained at INR 658 crore.

While CASA growth was 8.54% to INR 2.11 lakh crore, the bank aims to boost it further with the 'Aagaz' campaign, targeting INR 20,000 crore. The Cost-to-Income ratio, at 57.84%, missed the sub-56% guidance, but management expects to bring it below 50% within 2-3 years through diversification of revenue sources and cost settlement. The bank also anticipates its cost of deposits to come down to 4.65%-4.70% by June 2026 due to repricing and CASA growth, from the current 4.75%.

Acknowledging that MSME growth (16%) lagged other RAM segments, the bank has identified 225 MSME-intensive branches, designed cluster-specific products, and plans further outreach programs in Q4 FY26. Digital capabilities, including a mobile app ('Cent eeZ') and a 'GoNoGo' app for initial loan proposal screening, are being leveraged to improve customer experience, enhance underwriting quality, and support growth across all segments. These technological interventions are expected to strengthen asset quality in agriculture and MSME sectors.

The Capital Adequacy Ratio stands at 16.13% (CET1 at 13.87%), which management deems sufficient to support the targeted credit growth of INR 3,40,000 crore without the need for equity dilution. The bank is confident in maintaining its ROE and ROA above 1% and expects the CD ratio to reach 73%-74% by Q4 FY26, from the current 72%. Total ECL provisioning is estimated at INR 4,200 crore, with INR 2,675 crore remaining to be provided by April 2027.