Central Bank of India Q1 net profit rises 33% to Rs 1,169 crore

Mumbai, July 19, 2025 — The Central Bank of India reported a strong set of numbers for the first quarter of FY2025, with net profit rising 33% year-on-year to ₹1,169 crore. The robust performance was primarily driven by improved asset quality, higher net interest income (NII), and continued traction in loan growth across retail and MSME segments.

This marks the seventh consecutive quarter of profitability for the public sector lender, underscoring the success of its turnaround strategy after being under the Reserve Bank of India’s (RBI) Prompt Corrective Action (PCA) framework until September 2022.

Solid Financial Performance

According to the bank’s regulatory filing, net interest income (NII) — the difference between interest earned and interest expended — rose by 13.5% year-on-year to ₹3,271 crore, compared to ₹2,883 crore in Q1FY24. This was aided by a 10% growth in advances and stable net interest margins (NIMs), which stood at 3.45%, up from 3.31% in the same period last year.

The gross non-performing asset (GNPA) ratio improved significantly to 4.25% from 5.15%, while net NPA declined to 0.90% from 1.36%, reflecting the bank’s effective risk management and aggressive recovery drive.

Operating profit before provisions came in at ₹2,038 crore, up 22.4% year-on-year. Provisions and contingencies stood at ₹604 crore, compared to ₹498 crore in the year-ago period, largely on account of standard asset provisioning and treasury depreciation amid a volatile bond market.

Management Commentary

Commenting on the results, Managing Director and CEO Matam Venkata Rao said,

“Our first quarter results reflect the bank’s continued momentum in delivering consistent profitability and improving asset quality. We are focused on expanding our retail and MSME lending while ensuring robust governance and digital transformation.”

He added that the bank aims to bring down its GNPA below 4% by the end of FY2025, supported by recoveries and upgraded credit underwriting processes.

Analyst Insights

Market analysts have reacted positively to the bank's performance. Ravi Singhal, CEO at GCL Broking, stated:

“Central Bank of India’s numbers are a testament to its improved operational efficiency and prudent credit growth. With declining NPAs and improving margins, the stock is likely to attract renewed investor interest.”

Jyoti Roy, DVP - Equity Strategist at Angel One, noted:

“The improving return on assets (ROA) and return on equity (ROE) metrics show that the bank is on a sustainable growth path. However, the bank must remain cautious about rising interest rate volatility that can impact treasury income in upcoming quarters.”

Stock Market Reaction

Shares of Central Bank of India rose 3.8% intraday on the BSE post the results announcement, closing at ₹64.35, signaling investor optimism. The stock has gained nearly 28% in the last six months, outperforming the Nifty PSU Bank index which rose 19% in the same period.

Key Financial Highlights – Q1FY25 vs Q1FY24

Market Context and PSU Bank Performance

The Central Bank’s strong Q1 results come at a time when most public sector banks are reporting robust numbers on the back of improved credit offtake, better cost controls, and higher treasury income in the April-June quarter.

The RBI’s recent data shows credit growth in the banking system stood at around 16.4% YoY as of June-end, with public sector banks contributing a substantial portion. Moreover, the government’s capital infusion and ongoing PSU banking reforms have boosted investor sentiment in the sector.

Outlook for Investors

Analysts maintain a "Buy" rating on Central Bank of India, with target prices in the range of ₹70–₹75, citing continued earnings visibility, asset quality improvement, and relatively low valuation compared to private peers.

However, investors are advised to track upcoming macroeconomic developments, RBI policy signals, and global interest rate cues, which could impact banking sector dynamics.

Investment Pros:

• Low NPAs and higher profitability.

• Strong retail and MSME traction.

• Scope for re-rating among PSU bank peers.

Risks:

• Sensitivity to bond yield fluctuations.

• Rising competition from private lenders in digital banking space.

Central Bank of India’s first quarter performance is a clear signal of its operational turnaround and regained investor confidence. As the bank continues to build on its strengths and digital push, it is well-poised to emerge as a key PSU lender in the evolving Indian financial landscape.