Shares of Central Bank of India Ltd. fell nearly 2% on Friday even after the state-owned lender reported a 13.3% increase in net profit for the quarter ended June 30, helped by higher net interest income and lower provisions.
The stock traded at Rs 32.16 on the NSE, down nearly 2%, as investors assessed whether the bank can sustain loan growth, improve profitability and continue reducing stressed assets. While profit and asset quality improved, operating profit declined during the quarter.
Lower Provisions Lifts Profit
Central Bank of India reported a net profit of Rs 1,324 crore for the June quarter, compared with Rs 1,169 crore a year earlier.
Net interest income, which reflects income earned from the bank's lending business, increased 16% year on year to Rs 3,914 crore from Rs 3,383 crore.
Operating profit, however, fell 5.1% to Rs 2,186 crore from Rs 2,304 crore in the corresponding quarter last year.
Provisions declined to Rs 401.6 crore from Rs 521.1 crore a year earlier, supporting profit growth.
Asset Quality Improves
The lender reported an improvement in asset quality during the quarter. Gross non-performing assets eased to 2.60% from 2.67% in the previous quarter, while net non-performing assets remained unchanged at 0.49%.
The bank has scheduled a conference call with analysts and investors after market hours on Friday to discuss its quarterly performance.
Central Bank of India shares have fallen more than 16% over the past year. During the same period, the Nifty PSU Bank index has gained nearly 16%.
The stock traded at a price-to-earnings ratio of 6.58 at the close of the previous trading session. Its market capitalisation stood at Rs 28,946 crore.
ALSO READ: Central Bank Of India Q1 Result: Profit Rises 13% To Rs 1,324 Crore, Gross NPA At 2.60%
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