Earnings call transcript: Central Bank of India posts strong Q1 2026 growth

Earnings call transcript: Central Bank of India posts strong Q1 2026 growth

U.S. futures slide with AI worries in focus; Netflix disappoints Central Bank of India said first-quarter profit rose 13.26% from a year earlier and net interest income climbed 15.70%, as the state-run lender reported broad-based growth in loans, deposits and fee income-related initiatives. The bank also highlighted improving asset quality, with gross nonperforming assets falling to 2.60% and net NPA holding at 0.49%. Shares were down 2.79% at $31.7, compared with a previous close of $32.61, leaving the stock closer to the bottom of its 52-week range.

Key Takeaways - Net profit rose to INR 1,324 crore, supported by stronger core banking income. - Gross advances jumped 28.58% and deposits increased 11.68%, showing healthy balance-sheet expansion. - Asset quality improved, with gross NPA at 2.60% and slippage ratio at 0.29%.

- Management said it sees no need for a capital raise despite board approval for up to INR 4,000 crore. - The bank kept its medium-term guidance for 11%-12% deposit growth and 14%-16% loan growth. Company Performance Central Bank of India delivered a strong quarter on most operating measures.

Total global business rose 18.29% to INR 833,320 crore, while deposits reached INR 478,972 crore. Gross advances increased 28.58% to INR 354,348 crore, helped by faster growth in retail, agriculture, MSME and corporate lending. The bank said the corporate book grew 46.52% from a low base, while retail advances rose 23.92%, agriculture lending increased 21.14% and MSME loans grew 18.03%.

Management said the mix remains broadly aligned with its target of 65/35 plus or minus 5% between RAM and corporate lending. Profitability also improved. Return on equity rose to 14.92% from 14.17% a year earlier, while return on assets stood at 1.00%.

Net interest margin was 3.06%, above the bank’s guidance of 3% or more. Financial Highlights - Net profit: INR 1,324 crore, up 13.26% year over year. - Net interest income: INR 3,914 crore, up 15.70% year over year.

- Total income: INR 10,678 crore, up 3.08% year over year. - Gross global business: INR 833,320 crore, up 18.29% year over year. - Deposits: INR 478,972 crore, up 11.68% year over year.

- Gross advances: INR 354,348 crore, up 28.58% year over year. - Gross NPA: 2.60%, down 53 basis points year over year. - Net NPA: 0.49%, unchanged at a low level.

- Provision coverage ratio: about 95.86%. - Cost-to-income ratio: 55.40%, slightly higher than 55.30% a year earlier. Earnings vs. Forecast

No earnings-per-share or revenue forecast was available for the quarter, so a direct comparison with analyst estimates cannot be made. The bank did, however, report a solid operating performance, with net profit up 13.26%, net interest income up 15.70% and total income up 3.08%. The quarter’s strength appears to continue a positive trend seen in recent periods.

Loan growth remained well above deposit growth, and credit quality improved further. For a state-run bank, the combination of faster growth, stable margins and low net NPA suggests the quarter was broadly favorable, even without a formal earnings surprise measure. Market Reaction

The stock fell 2.79% to $31.7 from $32.61, suggesting investors took a cautious view despite the stronger operating numbers. The shares are now about 8.1% above their 52-week low of $29.32 and roughly 22.5% below the high of $40.92. The decline may reflect profit-taking, concerns about the pace of future growth, or questions around whether the current quarter was already priced in.

No unusual trading volume data was provided. Still, the move indicates that the market did not reward the results with a clear re-rating, even though the bank reported healthy growth and better asset quality. Outlook & Guidance Management kept its guidance unchanged.

The bank expects deposit growth of 11%-12% and advance growth of 14%-16% for the year. It also said it expects net interest margin to stay above 3%, return on assets to remain at 1% or higher, and the cost-to-income ratio to stay below 56%. The bank said growth will come from several areas: - Retail lending, including vehicle and housing loans.

- Agriculture lending, especially Kisan Credit Card accounts. - MSME lending. - Corporate lending in renewable energy, data centers, highway and metro projects, and commercial real estate.

Management also pointed to several strategic initiatives that could support future income: - A planned credit card business. - A new wealth management vertical. - Expansion of foreign exchange, bank guarantee and letter of credit businesses.

- Growth at GIFT City, where the bank recently opened an IFSC banking unit. - Insurance partnerships with Generali Central Life Insurance and Generali Central Insurance. Executive Commentary “Our total global business has grown by 18.29%, which is INR 833,320 crore.

Deposit increased by 11.68% to INR 4,78,972 crore. CASA remained our actually strong point of Central Bank of India,” said Managing Director and Chief Executive Sri Kalyan Kumar. He also pointed to the bank’s profitability and margin performance: “Net profit for the quarter increased by 13.26% to INR 1,324 crore.

Net Interest Margin is above three, aligning with our guidance to the market, it is 3.06%. ROA is 1%. ROE improved to 14.92% from 14.17%.”

On growth plans, Kumar said the bank has “well-laid” plans and expects to exceed guidance, adding that it is working on people, process and technology changes to support expansion. Risks and Challenges - Slower loan growth than the headline quarterly pace could make it harder to sustain the full-year guidance. -

The cost-to-income ratio remains above 55%, leaving limited room for operating leverage. - Liquidity ratios have come down from very high levels, which may reduce the bank’s cushion if funding conditions tighten. - The bank will eventually need to prepare for the expected credit loss framework, which management said could require INR 4,500 crore to INR 5,000 crore in provisions over time.

- Several new businesses, including credit cards, wealth management and GIFT City operations, will take time to contribute meaningfully. Q&A Analysts focused on growth, capital, liquidity and asset quality. Questions centered on whether the bank could sustain its fast loan growth through the rest of the year.

Management said it remains confident, citing a strong pipeline in renewable energy, data centers, highway projects and commercial real estate, along with continued traction in retail, agriculture and MSME lending. Another topic was capital. The board has approved raising up to INR 4,000 crore through equity or other instruments, but management said current capital levels are sufficient.

The bank reported a CRAR of 18.28% and CET1 of 16.24%, and said there is no immediate plan to raise funds. Analysts also asked about liquidity. Management explained that the decline in LCR and NSFR reflects better use of excess liquidity as the credit-deposit ratio improved from 64% to 74.10%.

The bank said the ratios remain above regulatory minimums. Questions on asset quality and recoveries drew detailed answers. Management said gross NPA improved to 2.60%, slippage ratio was 0.29%, and recoveries from technical write-offs could reach INR 2,200 crore to INR 2,500 crore in FY 2027.

The bank also said it expects continued gains from property auctions, settlements and NCLT recoveries. Analysts further asked about the bank’s new product push. Management confirmed plans for a credit card vertical, wealth management, NRI services and broader fee-based income initiatives through centralized forex and bank guarantee cells.

Full transcript - Central Bank of India (CBI) Q1 2027: Conference Moderator: Ladies and gentlemen, good day and welcome to the Central Bank of India Q1 FY 2027 earnings conference call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note this conference is being recorded. I now hand the conference over to Mr. Raju Barnawal from Antique Stock Broking Limited.

Thank you, and over to you, sir. Raju Barnawal, Analyst, Antique Stock Broking Limited: Thank you. Good afternoon, everyone.

Thank you for joining post-result conference call of Central Bank of India for Q1 FY 2027. Today from the senior management side, we have with us Sri Kalyan Kumar, MD and CEO, sir. Sri Murali Krishna, Executive Director, Sri Mahendra Dohare, Executive Director, Sri E. Ratan Kumar, Executive Director, and Mr. Vivek Kumar, Chief Financial Officer.

Without any further delay, I hand over the call to MD, sir, for their opening remarks, post which we will have a Q&A session. Thank you, and over to you, sir. Sri Kalyan Kumar, MD and CEO, Central Bank of India: Thank you.

Good afternoon. Today I am very happy presenting the key facts, key performance of Central Bank of India in Q1, that is 30th June 2026. Our total global business has grown by 18.29%, which is INR 833,320 crore.

Deposit increased by 11.68% to INR 4,78,972 crore. CASA remained our actually strong point of Central Bank of India. We maintain 46.61% of total deposit.

I will like to mention within CASA, saving account year-on-year has grown by 11.66%. Total CASA has grown by 11.16%. It shows our presence and trust of our customers in our brand value.

Similarly, in advances side, gross global advances increased by 28.58% to INR 3,54,348 crore. CD ratio we have improved to 74.10%. Towards asset quality also, gross NPA stood at 2.60%.

There is a year-on-year improvement of 53 basis points. Net NPA we have maintained at 0.49%. PCR approximately 95.86%.

Operating profit for the financial year, it is at INR 2,186 crore. Net profit for the quarter increased by 13.26% to INR 1,324 crore. Net Interest Margin is above three, aligning with our guidance to the market, it is 3.06%.

ROA is 1%. ROE improved to 14.92% from 14.17%. Cost to Income Ratio, again, it is 55.40%.

June 2025 quarter it was 55.30%. Slippage ratio stood at 0.29% for this quarter, where we can mark an improvement of six basis points. Capital-wise also, Central Bank of India is resilient.

CRAR improved to 18.28%, of which Tier 1 capital is 16.54%. In that way, another highlight towards profitability, which I shared with you, I am happy to share Net Interest Income grew by 15.70% on year-on-year basis, that is to INR 3,914 crore. Total income for Q1 FY 2027 improved by 3.08% to INR 10,678 crore.

Cost of deposit again moderated to, it has improved to 4.60%. 33 basis point improvement is there. In that way, I can tell that this cost of deposit has stabilized.

Now, again, in business side, I can tell you the RAM sector. RAM sector grew by 21.38%, retail grown by 23.92%, absolute terms it is INR 105,523 crore. Agriculture has grown by 21.14%, that is INR 64,274 crore.

MSME has grown by 18.03%, that is INR 71,308 crore. RAM and corporate ratio is 68/32. It is also aligning with our guidance, which we have given to market, 65/35 plus or minus 5%.

We have maintained credit cost also at 0.40%. There is improvement because previous quarter 2025 it was 0.68%. I am happy to share that Central Bank of India has opened one branch at GIFT City, that platform we are going to leverage for our overseas business for meeting our customers’ requirement for overseas business.

That already we have inaugurated on 29th June this year only, 2026. Today, Central Bank of India is having pan-India presence with 22,346 touch points, with 4,605 branches, with network of branches in rural semi-urban, it is 65%, one IFSC banking unit, 3,820 ATMs, 1,390 BC outlets. Also our presence in rural semi-urban, I want to highlight, it is reflected in our achievement of priority sector targets also.

Against the mandated 40%, we have actually crossed it and it is at 58%. Small and marginal farmer, against 10%, we have crossed more than 11%. For micro enterprises, which is actually really, I can tell you, the growth engine for our economy, which creates employment, generates income in the lower segment of the society.

There, instead of 7.5%, we have crossed 15%. In that, I can tell you that Central Bank of India, an organization of 114+ years of its existence, serving nation in true sense in Bharat by supporting Indian economy in all these important areas. CASA, I have already told you, we have maintained 46.61%.

Term deposits has grown by more than 12%. In that way, CD ratio from 64%, it was in June 2025, now our CD ratio has improved to 74%. Liquidity coverage ratio was actually more than 210%, now it is moderated to 156%.

In that way, overall improvement in terms of interest income, in terms of growth, in terms of our commitment towards public, we have done this. Also some structural changes I would like to highlight. We are working on our people, process, and technology.

In people side, our 1,000 credit officer who were undergoing training, specialized training for credit, they are going to join us in the first week of October. We are going to deploy them on our all potential credit centers. We have planned to open more corporate finance branch and mid corporate branch so that we can play meaningfully in the growth history of Indian banking.

Secondly, for forex side and for improvement in non-interest income side, we have opened centralized BG cell, centralized forex cell is already operating. We have 159 NRI desks in our different branches, we are going to market all these products which Central Bank of India is having through our all these strength, physical presence, and marketing team. We have hired 300 marketing officers.

They are also being posted now. They have reported and they are getting posting. We have opened customer acquisition centers at 35 places and government business centers also at nine places.

Through this, we are actually really coming back into the market with all these structural changes, capability building, process simplification, and technological upgradation. We are actually really foresee good growth and good profitability in coming years. Thank you.

Now I am open for questions. Conference Moderator: Thank you. We will now begin the question and answer session.

Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ashok Ajmera with Ajcon Global. Please go ahead.

Ashok Ajmera, Analyst, Ajcon Global: Other terms and conditions. Last column will be formalized. When the final agreement.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: Ajmera ji. Conference Moderator: Ashok Ajmera, sir, your line has been unmuted. Please go ahead with your question. Ashok Ajmera, Analyst, Ajcon Global: The points you made in your branch.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: He is not speaking to us. Conference Moderator: Yes, sir.

We’ll move on to the next question. It’s on the line of Sushil Choksey with Indus Equity Advisors. Please go ahead.

Sushil Choksey, Analyst, Indus Equity Advisors: Sir, congratulations on excellent performance in the quarter. Unless I missed, can I get some guidance on growth for the year looking at such high advance? What is the ROA, ROE, NIM guidance?

About the corporate and RAM book you’ve given a guidance. Do we see because of GIFT City, what kind of pipeline are we likely to generate? What is our undisbursed corporate loan and retail pipeline looking like?

More of a flavor because you are one on the high end of growth in the current quarter where PSU banks in the established results are. We get a better flavor for the coming quarters. Sri Kalyan Kumar, MD and CEO, Central Bank of India:

Actually, I have given you guidance about composition of our advances, RAM and corporate. Our guidance to market towards the resources side, 11%-12% in deposits growth and 14%-16% in advances growth. I am still confident that in the current quarter also, we are going to align with this guidance, which we have already given to the market.

RAM side, retail, agriculture, MSME side growth, which I have already told, that RAM sector grown by 21.38%, retail approximately 24%, agriculture 21%, MSME 18%. The opportunities are there. Our presence, our network is also very supportive, conducive.

In that way, I am sure that this growth, which we have given guidance to the market, we are going to achieve. Major areas, in corporate side also, if you can see as of June 25, our corporate book was INR 76,966 crore, and it has grown to INR 112,770 crore, and growth is 46.52%. As base was very low, that’s why this growth number is visible to us.

Major areas in corporate side is renewable energy, data centers, and also some projects in HAM side and good opportunities we are observing. We are getting good proposals, some CRE proposals also. These are the areas in corporate side.

MSME side also, we are getting good traction. Agriculture, gold loan, and SHG are going to be the growth engine. We have brought in some structural changes also.

Dedicated gold loan division and also SHG division are being opened where head of these verticals will directly work under the guidance of Executive Director. In gold loan segment, total book is INR 36,000 crore, though growth is good as compared to previous year, but still lot of scope is available in terms of our presence in South India, which has very good experience of gold loan. SHG side also, there is growth, but still lot of opportunities are available.

We are going to harness this segment, which are going to be the growth engine for our credit growth. Deposit side, already in my earlier address also, I have already conveyed that several products for several customers are available. I will give you example regarding one product, Cent Queen.

Very good traction. INR 1,457 crore we have mobilized under Cent Queen. There is one product that is Salary Cent Prestige.

INR 787 crore we mobilized in that segment. These things actually act as platform for cross-selling for our retail business. Vehicle loan, housing loan, car loan.

In that way, I can tell you that these numbers we will be able to achieve very easily. Coming to your ROA and NIM. I have given guidance NIM will be 3 and above, still we are maintaining.

ROA 1 and above. That also this time also we maintain, and we are still saying that it will be 1 and above, return on asset. Regarding other ROE.

ROE also improved from 14.17% to 14.92%. In that way, all these efficiency parameters, again, business per branches, we are at INR 185 crore per branch. Per employee business also improved to INR 24 crore.

In that way, I can assure you not only in growth numbers but also in efficiency numbers also, Central Bank of India is progressing towards not only growth but also resiliency. Sushil Choksey, Analyst, Indus Equity Advisors: Sir, what would be our growth advance undisbursed number today, and where do you see you ending a CD ratio for the year-end, and outlook on treasury and digital spend for the year? Sri Kalyan Kumar, MD and CEO, Central Bank of India: Undisbursed sanction is approximately INR 5,000 crore.

Other NBG we conduct every week, there are proposals which we are receiving, but undisbursed as of previous quarter is INR 5,000 crore. Regarding treasury income, this time income is INR 276 crore. As compared to previous year, it is less, you understand, due to market conditions and all, it got impacted.

This time our aim for getting more return in investment side also, we are taking initiatives. That side also, expecting some moderation and improvement we are expecting. Sushil Choksey, Analyst, Indus Equity Advisors: Sir, any view on ECL provisioning?

Sri Kalyan Kumar, MD and CEO, Central Bank of India: ECL, actually already we have made provision of stage 1 and stage 2 for INR 1,525 crore. That buffer we are having. Approximately INR 4,500 crore-INR 5,000 crore total we’ll require.

For that purpose, I understand our current profit numbers are enough, and CRAR you have seen, 18.28% is there. Even though there are provisions, we can stagger it to five years, but even though we go for one time also we take hit, then 80 basis points only impact we are expecting. Due to improvement in credit underwriting qualities and other improvement in credit monitoring mechanism, I am sure that this CD calculation for these numbers will be under control, and we’ll be easily able to shift to ECL from 1st April 2027.

Sushil Choksey, Analyst, Indus Equity Advisors: Sir, my last question in this round, sir. What is your expectation for recovery and monetizing the recovery even from technical written-off books? Sri Kalyan Kumar, MD and CEO, Central Bank of India:

For technical written-off book, we are having INR 32,900 plus crore in the KT and 9,200 odd numbers in our actually normal books. Absolute numbers I am talking about. We expect, if I can tell you last previous year’s numbers, INR 1,300 crore, INR 1,400 crore, INR 1,700 crore and INR 2,100 crore we have recovered out of technical written-off account in last few year-wise I have told you.

This year also, I’m expecting from INR 2,200 crore-INR 2,500 crore out of this technically written-off account. Approximately in major accounts, we are expecting INR 235 crore through OTS or liquidation or sale of property. Also another INR 200 crore we are expecting from NCLT.

INR 500 crore we are expecting from written-off account in this quarter. Apart from that, I will like to tell you regarding one-time settlement in eligible accounts we are pursuing and also auction of secured assets under SARFAESI Act. In first quarter, we have sold property and approved OTS in 121 cases out of 810 properties put on auction.

In the current financial year, we are targeting to sell 600-700 properties against 460 properties in the last financial year. We are organizing property expos and utilizing services of property consultants so that visibility and marketability of properties get enhanced. In that way, I can assure you that from recovery side, this quarter, we are going to achieve the numbers.

Sushil Choksey, Analyst, Indus Equity Advisors: Congratulations to Centralite and best wishes for the year to come. Sri Kalyan Kumar, MD and CEO, Central Bank of India: Thank you. Conference Moderator: The next question comes from the line of Tanya Kothary with AUM Capital Market.

Please go ahead. Tanya Kothary, Analyst, AUM Capital Market: Congratulations to the management team on delivering another quarter of healthy business growth and continued improvement in asset quality. I just have couple of questions.

The board has approved raising up to around INR 4,000 crore through equity or basically instruments. What is the expected timeline and the preferred route for the capital raising? Sri Kalyan Kumar, MD and CEO, Central Bank of India: Sir, capital raising.

Actually, see our already CRAR is 18.28% this year, and CET1 is also 16.24%. In that way, we are having enough capital, and we don’t need to support our growth guidance, which we have given to the market. We are having enough capital.

Therefore, there is no any current plan for raising capital. Tanya Kothary, Analyst, AUM Capital Market: Sir, the liquidity coverage ratio declined from 235% to 156%. Also NSFR reduced from 147% to 128%, but both remain above regulatory requirements.

The fall is very sharp. Can you elaborate on this, sir? Sri Kalyan Kumar, MD and CEO, Central Bank of India:

Actually, first we should understand what is the optimum level for LCR and NSFR and what is the purpose behind it, keeping it high quality liquid assets for this LCR. Having comfort of having 215% and having CD ratio of 66% or 64% for any vibrant organization and growing organization, it is liability because those high quality liquid assets and all those things comes with a cost. Therefore, those things must be deployed optimally so that we can get better return out of it.

That’s why those were comforts which Central Bank of India was having. Now, as our CD ratio has increased from 64% as of June 2025 to 74% as of June 2026, we are leveraging on all these resources available within us, and that is good sign to the market that we are optimally utilizing our liquidity and still it is as compared to other organization you can see that those are 130% range in liquidity coverage ratio. We are still above that.

As per risk management, whatever is the threshold level, we are still above those levels. That’s why this is a good sign, I would like to tell you. Tanya Kothary, Analyst, AUM Capital Market: Okay, sir.

Sir, the advance grew at very strong 28.6% year-over-year ahead of the industry growth. Conference Moderator: Ma’am, sorry to interrupt. Tanya ma’am, could you please use your handset?

Sri Kalyan Kumar, MD and CEO, Central Bank of India: Voice is not very clear, actually. Conference Moderator: Yes, ma’am. Tanya Kothary, Analyst, AUM Capital Market: Just a second, sir.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: You can continue. You can speak, no issue. We are making our own.

Tanya Kothary, Analyst, AUM Capital Market: Sir, advance grew a strong 28% year-on-year ahead of the industry growth. Which segment are driving this growth and what safeguards are in place to ensure that credit writing standards are not diluted? Sri Kalyan Kumar, MD and CEO, Central Bank of India:

Actually, if you see, as of June 25, our corporate loan book was INR 76,699 crore. Currently, as of June 26, it is INR 1,12,500 crore. The growth is 46%.

46.52% to be precise. This is only due to low base effect because having INR 76,966 and from there we have grown to INR 1,12,770 crore. That’s why.

RAM sector, you see our growth is 21.38%. Retail has grown by 23.94%, agriculture by 21%, MSME by 18%. In that way, we are not an outlier as we are having very small base.

That’s why it is looking that our growth is more than 28%. As far as trade underwriting is concerned, I can tell you, we have done one analysis that the trade growth after first October, INR 1,22,000 crore was disbursed. Out of that, stress was very less.

The slippage ratio, it is 0.29 this time. There is consistent improvement in slippage ratio. I will tell you, if we reduce the agriculture KCC numbers which got slipped, INR 200 crore out of total INR 986 crore which got slipped and previous year, June 2025, it was INR 989 crore.

That agriculture side INR 200 crore was the contributor. You know that debt waiver scheme is coming and those things will get liquidated. If we remove those KCC numbers, then our slippage ratio is 0.19.

There is consistent improvement in underwriting quality, post disbursement trade monitoring quality. In that way, I can assure you that we have very clear cut control and oversight over this underwriting standards and also this lending processes. Tanya Kothary, Analyst, AUM Capital Market: Thank you so much, sir, and best wishes for your upcoming quarter.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: Thank you, madam. Thank you. Conference Moderator: Thank you.

Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question comes from the line of Ashlesh Sonje with Kotak Securities. Please go ahead.

Ashlesh Sonje, Analyst, Kotak Securities: Hi, sir. Good evening. Sir, three, four questions from my side.

Firstly, on the term deposit book, is there any further repricing left of the term deposits which can help you reduce the cost of deposits going forward? Sri Kalyan Kumar, MD and CEO, Central Bank of India: Term deposit almost is repriced now, 4.60% is the cost of deposit. Almost it is over by now.

That I can tell you. In growth side, if you want to know, term deposit has grown by 12% in our bank and majority are below INR 3 crores, means retail deposit. 85% of our deposit are under INR 3 crores segment.

Ashlesh Sonje, Analyst, Kotak Securities: Sorry, you said 55%? Sri Kalyan Kumar, MD and CEO, Central Bank of India: 85% are below INR 3 crores.

Ashlesh Sonje, Analyst, Kotak Securities: Understood, sir. Sir, secondly, on the FCNR deposits, how much have you mobilized thus far, and how much do you expect to mobilize till the scheme is available? Sri Kalyan Kumar, MD and CEO, Central Bank of India: FCNR till now we have mobilized $8.4 million and we are expecting to mobilize by September $400 million.

Ashlesh Sonje, Analyst, Kotak Securities: Understood, sir. Sir, thirdly, on ECLGS scheme, how much have you sanctioned thus far and how much have you disbursed? Sri Kalyan Kumar, MD and CEO, Central Bank of India: ECLGS sanction numbers actually approximately INR 4,000 crore.

I will just tell you. Just a minute. Total application actually sanctioned is 34,824.

Amount is INR 4,646 crores and guarantee issued is 30,561 accounts. Amount is INR 4,353 crores. Within which disbursement happened in 27,567 accounts and it is INR 3,693 crores.

This is about ECLGS side. Ashlesh Sonje, Analyst, Kotak Securities: Understood. Sir, just lastly, you now have a fairly large corporate loan book of INR 1.1 trillion roughly.

What is the average yield on this corporate book in this June quarter, and what was it in the March quarter? Average yield on the corporate book. Sri Kalyan Kumar, MD and CEO, Central Bank of India: Yield on advances is 7.89%.

It has improved from 7.78%. For corporate yield separately, it is available corporate? Ashlesh Sonje, Analyst, Kotak Securities: We give it.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: Will provide you. Currently we don’t have. Overall yield.

Ashlesh Sonje, Analyst, Kotak Securities: Understood Sri Kalyan Kumar, MD and CEO, Central Bank of India: yield on advances have improved to 7.89. Previous quarter it was 7.78. Ashlesh Sonje, Analyst, Kotak Securities: Okay, sir.

Just to put the question differently, do you expect the overall yield to go up going forward? Sri Kalyan Kumar, MD and CEO, Central Bank of India: Yes.

Overall yield will go forward because the RAM side, we are focusing on gold loan SHG. We are bringing structural changes. Head of these two divisions are going to report directly to ED.

Under guidance of ED they will work. Our physical presence in South India and other upcoming sectors where opportunities for these finances are huge. There yield is also 8 plus, both in gold loan and SHG side.

There we expect that our yield will further improve from 7.89 to anywhere between 8 we are thinking that as of March 27, we will reach up to 8. Ashlesh Sonje, Analyst, Kotak Securities: Understood. Sir, just one follow-up on the gold loan piece.

These are all MCLR linked loans on gold loans or they are linked? Sri Kalyan Kumar, MD and CEO, Central Bank of India: Gold loan actually is based upon fee.

Gold loan, 8.11% is the rate. Ashlesh Sonje, Analyst, Kotak Securities: Okay. Speaker: MCLR.

Both co. For agriculture MCLR and for retail, EBLR. Sri Kalyan Kumar, MD and CEO, Central Bank of India:

Naturally. For agriculture, it is MCLR linked and retail it is non MCLR. It is external benchmark linked.

Ashlesh Sonje, Analyst, Kotak Securities: Understood, sir. Perfect. Thank you very much.

Those were all the questions I had. Sri Kalyan Kumar, MD and CEO, Central Bank of India: Thank you. Conference Moderator: The next question comes from the line of Amit Mishra with Indus Equity Advisors.

Please go ahead. Amit Mishra, Analyst, Indus Equity Advisors: Hello. Good evening, sir.

Thanks for the opportunity. Sir, I have few questions. First, sir, cost to income.

You have given target of less than 56% and we have been in past three years, we are around somewhere around 58%-57%. What are step additional we are taking this year to get it below 56%? I just wanted to know that.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: See, this is one of the efficiency area, which is our priority. Both towards improvement in income and also cost curtailment, both strategically we are working. First of all, I will talk about the improvement in income.

You see our interest income has increased significantly and NII has grown by more than 15.70%. Now we are focusing upon non-interest income side, where fee-based income we can maximize. We have opened centralized Forex cell, we have opened centralized BG cell, and in these two areas we are focusing upon our actually LC/LG business, where our own client who are availing these services outside our bank, we are contacting them, we are bringing them, we are organizing exporter meet.

Three, four centers we have already organized, and we are going to organize. We have opened NRI cell. GIFT City will also support us in actually ramping up this fee-based and other income.

In that way for bringing improvement in income, we are having Generali Life Insurance and non-life insurance. In both segment we are expecting because previous year was establishment stage, now they have been stabilized. This year we are expecting good income from those business side.

Those are our actually opportunities available to us. There we are going big way. Also one important intervention, we have opened marketing cell headed by general manager, and 35 customer acquisition centers we have opened and nine government business centers we have opened.

Through these marketing officers, we are going to play big way for mobilizing this insurance business, this LC/LG business through the concept of 1,000 credit officers. We are placing them as relationship manager also for big corporates. In that way, we will be able to garner better return and bring overall improvement in the income side.

To our cost curtailment, we have identified different cost centers, like from maintenance of cash retention balance to how optimized we can use our ATMs, we can use our currency chest, also how we can actually see the proper utilization of our lend bank and also assets, curtailment of expenditure under electricity, water, stationery. All these things in a structured format we are following up, monitoring, and these things I am sure that in coming year 1.5%-1.6% every year, I am sure that we’ll be able to reduce our cost to income ratio.

Amit Mishra, Analyst, Indus Equity Advisors: Okay. Thank you, sir.

Sir, you mentioned in income part, are we planning to launch any credit cards or other value-added services? I’ve seen some other banks also started their credit cards. Any plans for our bank?

Sri Kalyan Kumar, MD and CEO, Central Bank of India: We have plans. Amit Mishra, Analyst, Indus Equity Advisors: We used to have a good portfolio of credit cards earlier. Sri Kalyan Kumar, MD and CEO, Central Bank of India: We are having 8.33 crore customer base.

Therefore, we have got approval from board for establishment of wealth management vertical, credit card vertical, NRI and marketing. We are entering into credit card segment also. We have initiated the steps for establishing these segments, and which is very much required for salary accounts and mobilization of other businesses, some premium customers also.

You are right in asking us that these segments also we are entering in near future. Amit Mishra, Analyst, Indus Equity Advisors: Okay, sir. Sir, one last question.

Sir, in GIFT City, I think we have disbursed around INR 470 crore right now. Any plans for full year? How much portfolio you want in that from GIFT City?

What kind of yields are we getting there if you can mention? Sri Kalyan Kumar, MD and CEO, Central Bank of India: See, deposit of $200 million and trade book of $500 million over the next few years we are planning. As on 29th June only it was inaugurated.

We are contacting our existing customers and also prospective customers so that we can get good business from this platform. Amit Mishra, Analyst, Indus Equity Advisors: Okay, sir. Thank you.

Thank you so much. Sri Kalyan Kumar, MD and CEO, Central Bank of India: Thank you. Conference Moderator: Thank you.

Participants, if you wish to ask a question you may press star and one. We have a follow-up question. It is from the line of Ashok Ajmera from Ajcon Global.

Please go ahead. Ashok Ajmera, Analyst, Ajcon Global: Yeah.

I am extremely sorry, sir. My name had come in the first question itself, but a very urgent another call had come, and I think I disturbed you also for some five, 10 seconds. Sri Kalyan Kumar, MD and CEO, Central Bank of India: No problem.

Ashok Ajmera, Analyst, Ajcon Global: Yeah. I heard you, most of your discussion, the answers.

Many of the questions have already been answered. I have a couple of specific observations and some questions, sir. First of all, compliments to you for good set of numbers.

Very good on profitability. Front, many of the other parameters are also met or little beyond than the targets which were given. Having said that, my first thing is, sir, though on annualized basis, our credit growth is 28.58%, the credit growth for the quarter is only 2.85%.

Going forward, in order to meet our performance and our kind of results which we give, how do you plan to increase our loan book in the remaining three quarters traction, the sanction pipeline, and the mix of corporate and RAM? What do you have in mind, and what do you have to say on this, sir? Sri Kalyan Kumar, MD and CEO, Central Bank of India: See, growth actually is not a challenge for Central Bank of India now.

We have enough capital, we have enough resources, and the momentum and also credit underwriting quality, post disbursement, monitoring part, all these things we have taken care of. That actually gives us enough confidence to grow at a faster rate. Resources are available, capital is available, systems and processes are in place.

Better oversight mechanism are there, which is being reflected in maintaining asset quality, slippage. In that way, I am still aligning with my guidance, which I have given to the market. Deposit 11%-12% and advances 14%-16%.

We very easily will be able to maintain this growth rate. As you told that quarter-on-quarter growth looks actually approximately 3%. That actually I am sure that these things will be continued because we are getting good proposals in corporate side also.

RAM sector also, as I have told you, retail, we have grown by approximately 23.9%. Agriculture grown by 21%, MSME grown by 18%. Now with the opening of gold SHG sale, the head will directly work under the guidance of Executive Director.

This segment we are finding good traction because our presence in South India, where these products are very popular. We are entering in those areas with proper branding and proper actually strategy. I am sure that yield will also improve, as it has already improved, you have seen from our number.

Yield will also improve, and numbers will also improve, both RAM segment and also corporate segment. Ashok Ajmera, Analyst, Ajcon Global: Sir, some color on this ECLGS, how much is sanctioned and disbursed, and how much total it will help in increasing our loan book?

Sri Kalyan Kumar, MD and CEO, Central Bank of India: ECLGS, our total applications received on Jan Samarth portal was 45,803. Amount was INR 5,800 crore. Within which we have sanctioned 34,824 eligible accounts.

Amount was INR 4,646 crore. And guarantee issued in the account of 30,561, our amount is INR 4,353 crore. Within which disbursement already done in 27,567 accounts.

Amount is INR 3,693 crore. This is the actually data related to ECLGS. Ashok Ajmera, Analyst, Ajcon Global: Yes, sir.

Sir, there’s an old question on this recovery from that old aviation account. What is happening on that, sir? Whether it has been substantial recovery has already taken place in past one and a half years, or are we expecting because that property sale was also there.

Can you give some color on that, sir? Go First recovery. Sri Kalyan Kumar, MD and CEO, Central Bank of India: We have received INR 515 crore at CGTMSE guarantee.

There is a parcel of land you told, we are putting it on auction. Again, in the month of August, we are going for fresh auction of this parcel of land. That is the recovery in this account that I want to tell you.

Ashok Ajmera, Analyst, Ajcon Global: Okay. Sir, something on the progress on this, our insurance acquisitions, Generali Central Life Insurance and Generali Central Insurance.

What is the progress there, sir, and how much capital has so far additionally has been put in? Sri Kalyan Kumar, MD and CEO, Central Bank of India: See, we have 26% stake in both entities. Ashok Ajmera, Analyst, Ajcon Global:

Yes. Sri Kalyan Kumar, MD and CEO, Central Bank of India: Generali life and Generali Central Insurance. We have a 26% stake.

Previous year, establishment was getting done. Now they are back in the business, and this year we are expecting good amount of income from both life and non-life businesses. Regarding exact amount of capital, I will provide you later.

Currently, I am not having that number. You are having that number? Can you speak?

In both. Ashok Ajmera, Analyst, Ajcon Global: Both. Sri Kalyan Kumar, MD and CEO, Central Bank of India: INR 627 crore is the capital invested by us in both the companies.

Ashok Ajmera, Analyst, Ajcon Global: Okay. Sri Kalyan Kumar, MD and CEO, Central Bank of India: Hope you have heard. Yeah.

Ashok Ajmera, Analyst, Ajcon Global: Yeah. Sir, just a small observation on the segment results.

There is lot of variations in the quarterly numbers. Treasury income INR 621 crore as against INR 353, that is okay, maybe acceptable. In case of the retail book, the profit is INR 1,377 crore against INR 633 crore.

In wholesale book, it is minus INR 139 crore against INR 284 crore. Unallocated minus INR 75 crore against the profit of INR 322 crores. Is there any change in the segment allocation of the profitability or it is because of the imbalance of the provisioning in the various segments?

Sri Kalyan Kumar, MD and CEO, Central Bank of India: Provisioning has actually come down. That is not the case. What you are saying, it depends upon the numbers which undergone changes realistically.

Ashok Ajmera, Analyst, Ajcon Global: Anyway, thanks sir. Thank you very much.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: Thank you. Conference Moderator: Thank you. A reminder to all participants that you may press star and one to ask a question.

Thank you. There are no further questions at this time, I would like to hand the conference over to the management for closing comments. Sri Kalyan Kumar, MD and CEO, Central Bank of India:

Yeah. Thank you. Again, I have actually already conveyed our strategy and also conveyed about the numbers.

I can assure all the stakeholders that Central Bank of India is strong fitting in terms of growth. We have well-laid plan not only for this year, for next year also. Our team is working on those directions.

The steps towards capability building, towards structural changes, and also the strength which Central Bank of India is having in terms of physical presence, in terms of network, in terms of its strength of CASA and also other interventions which have been taken. I can assure the guidance which we have given to the market, we are not only going to achieve, but also exceed those numbers. With this, thank you.

All the best. Conference Moderator: Thank you, sir. On behalf of Antique Stock Broking Limited, that concludes this conference.

Thank you for joining us. You may now disconnect your lines. Thank you.

Sri Kalyan Kumar, MD and CEO, Central Bank of India: Thank you.