Ladies and gentlemen, good day and welcome to the Central Bank of India Q2 FY26 conference call hosted by Antique Stock Broking Limited. As a reminder, all the participant lines will be on 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 touchtone phone. I now hand the conference over to Mr. Siddharth Singh from Antique Stock Broking . Thank you, and over to you, Mr. Singh.
Thank you. Good afternoon, everyone, and thank you for joining the post-result conference call of Central Bank of India. Today, from the Senior Management side, we have with us Shri Kalyan Kumar, Managing Director and CEO, Shri M.V. Murali Krishna, Executive Director, Shri Mahendra Dohare, Executive Director, and Mr. Mukul Singh, Chief Financial Officer. Now, without any further delay, I hand over the call to MD Sir for his opening remarks, post which we will have a Q&A session. Thank you, and over to you.
Good afternoon. Thanks for the opportunity. First of all, actually, I will speak in brief about the financial performance of this half-year, September 2025. Central Bank of India is a strong brand with a legacy of 113+ years and having a strong rural and semi-urban presence. It is having 65% of total branches in rural semi-urban centers. That is a great strength. I am happy to share with you all that total business as of September 2025, year- on- year, has grown by 14.43%. That is INR 737,938 crore, which is in alignment with the direction given to the market and total deposits grown by 13.40%. That is INR 444,450 crore. CASA, which is a strength of Central Bank of India, which is 46.83%, it has grown by 8.55%. That is INR 207,616 crore. Similarly, gross advances has grown by 16%. That is INR 293,488 crore.
RAM has grown by 15.23%. That is INR 294,448 crore. Total income has grown year- on- year 4.07%. That is INR 10,250 crore, within which interest income has increased to INR 8,744 crore. That is 6.61% of total income. However, total non-interest income got reduced by INR 280 crore over June 2025 quarter. There is an increase of 32.86% year- on- year in net profit, which is INR 1,213 crore. It is also worth to mention that our gross NPA reduced to 3.01%, and there is a reduction of 158 basis points year- on- year. Net NPA reduced by 21 basis points, 2.48%. I am happy to share return on assets, as a surety, increased by 17 basis points to 1.01%. It is above 1%. Return on equity increased by 155 basis points to 14.22%.
In loan advances, due to obvious reasons, it got reduced to 8.36% as of September 2025, from 8.77% as of September 2024. That is a reduction of 41 basis points. Cost of deposit also got increased by 21 basis points to 4.88% as of September 2025. You know there is a lag in actually repricing of deposits due to contractual engagement with the customers. That's why with lag, this is getting repriced. NIM has reduced by 52 basis points to 2.89%. Credit cost has reduced by 34 basis points to 2.1%. This is also one strong point of Central Bank of India. Slippage ratio reduced by 8 basis points to 2.30%, which is year- on- year. One major area of concern for us is cost-to-income ratio. That is 62.72%. There is an increase of 553 basis points year- on- year from 57.19%.
Return on assets, as I told, it has improved. Net interest income has reduced by 2.96% quarter on quarter and 3.72% year- on- year. Operating profit also, it is INR 1,786 crore as of September 2025. It got reduced by 22% quarter- on- quarter and 17.5% year- on- year. This is also a major area of improvement for us. One nice thing which I want to share, due to effective containment of slippages and improvement in asset quality, provisions as of September 2025 is INR 573 crore only, reduced from June 2025, which was INR 1,135 crore. There is a 54% reduction in provision year- on- year and 50% quarter- on- quarter.
What I mean to say with this balance sheet, there are several strong points which show actually improvement in efficiency in terms of containment of slippages, in terms of management of asset quality, in terms of return on assets. However, the areas of improvement in terms of credit-deposit ratio and also more focused towards improvement in income sources, revenue sources, and these areas are going to be our area of improvement in the coming year. I can assure you the kind of initiatives which we are taking, which we are going to build up in our major focus area. Actually, I want to share my vision also. This is my first interaction with you all.
That way, our vision is to build the Central Bank of India as a digitally enabled customer-centric bank, where actually our focus would be to optimize the returns to all our stakeholders by revisiting our business processes. What I mean to say in technology, when we talk about technology, then today customers' requirement is actually the revamped business model where technology plays a very important role. I am happy to say that Central Bank of India has done good work in the development of this technology. Now, the challenge is to bring in improvement in adoption level. Suppose if we call about our focus is CASA. In CASA, pleasurable onboarding experience to customers, providing this is very important. Also giving them superior banking experience, which is safe and resilient, that is also our responsibility. That is possible. That is going to be our focus area.
In the CASA sector, actually, still we are actually doing good, but there is a need to revisit in that direction. I am happy to share with you segment-wise product. Though it is here, we are revisiting, benchmarking those products with the industry-best standard. With our marketing team and our business units, we are going to focus upon mobilizing more and more salary accounts. Their technology will play an important role. We have provided tabs to every branch. Our mobile app is very robust. There is good adoption level. I am told 8.3 million customers are there who are on the mobile platform. It is going to increase in the coming years. Another important area which we are going to focus is RAM, Retail, Agriculture, and MSME. Growth is very good in all these three areas. You must have seen our press release.
It is not only in double digits, but it is performing well. That is also going to be our core area. We are going to identify a good number of branches in agriculture-focused clusters and MSME-focused clusters. In a very focused way, we are going to focus upon investment credit in agriculture. Also, in the MSME sector, we are going to play a very important role in the coming quarter. There are good margins, and that is going to support us. We are also planning to play an important role in the corporate side, also looking to our size. We will also play our role in those directions. Third, slippage containment is very good. Now, also SMA assets are under control. In that way, I can assure you our fit-on-street model integrated with our own internal monitoring process and technology is also playing an important role here.
We are going to further improve our credit underwriting processes and monitoring so that this containment of slippages is continued like this or also will bring improvement in this segment. Fourth important area is our actual recovery. You see, NPA, INR 35,000 crore is under the write-off amount, and the INR 8,000 plus crore is under the gross NPA amount, which we are having. In those areas, we see that a lot of scope in recovery is available. Though we depend upon NCLT provision and all that, more than INR 25,000 crore is there. That would be through industry. The remaining amount we are focusing upon, this is going to be the top priority of our top management, where we are going to play a very important role that will boost our actual recovery in write-off, and that would add to our bottom line.
In that way, I can assure you with the condition and current situation where the Central Bank of India is standing today, we are in the coming years actually really built upon our strength. Also, the area of improvement, where I said during my initial remark, will certainly make up to those points by improvement in credit-deposit ratio, also improvement in income sources. All these things are going to be our priorities. With this, I will stop here, and I invite questions from you. I will answer your questions. Wherever required, I will invite Sri Mukul, our CFO, and other senior team present here to support if you want to also add value to answers to those questions. Now, over to you. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sushil Choksey from Indus Equity Advisors. Please go ahead.
Sir, congratulations for the stable result and your appointment. Best wishes for the tenure. Sir, my first question, the bank has been very stable where CASA is concerned. You highlighted in your vision that you would like to increase your RAM and agriculture. With RAM, what kind of new initiatives can we see over a period of the next six months or a year, which would strengthen the bank's positions? We are a pioneer in terms of size with co-lending, and our portfolio is concerned with absolute brilliant performance as per quarter- on- quarter, which we have heard. If you can give some highlights there too.
Yeah. First of all, thanks for your good message and good words. See, in agriculture and MSME, these two are going to our major focus area. Here, there are going to be two approaches. One approach, you know the math, where actually we are going to support through technology. There are straight-through processes journey capturing MSME advances. Also, in the next six months to one year, we are going to finance value chain financing, we call it in agriculture, more focused in the dairy side and also other side. There are business models which we are going to develop here. There, we can play, we are going to play an important role. Also, cold chain financing.
We are actually, we are having spread across the country where this warehouse part and cold chain part is also a very important area where a lot of investments are coming and a lot of opportunity for financing would be available there. Central Bank of India will also play in this area. Coming to other aspects, actually, there are active clusters. Those are activity-based clusters where the whole ecosystem for improvement of these areas, agriculture and MSME, is going on. A lot of government initiatives are also there. There to play and harness those opportunities fruitfully and effectively, we are going to strengthen our branch, which is present in those clusters with the manpower, technology, and other support systems that we can actually convert those opportunities into real business. Similarly, in the MSME side, both approaches, ULI, other digital journeys are also available with us.
MSME digital loan and EGST and all those things are also available with us. Through that, masses will avail opportunity of getting financed seamlessly with us. Another area where clusters, say in Surat, textile cluster is there. At Rajkot, the machinery sector is there. Lahnau, near Lahnau, also a lot of clusters are actually there. In those clusters, we will strengthen our branch, map those branches with the activities of those clusters. We are going to support them with the best of the products, competitive rates, and also technical know-how, which is available there so that we can play an important role in nation building, which is the aim and aspiration of the country also in strengthening those ecosystems where all these actually branches are operating. We, Central Bank of India, as an important public sector bank, will play an important role in strengthening all these areas.
These are going to our strategy in the next six months to one year.
Sir, you have rich experience with 20 years in Union Bank, four years in PN B, over 20 years in Union Bank, respective Executive Directors who have come from large banks. Our bank has a big brand from Western India where presence is concerned, irrespective of the past history where we had some issues. Today, we stand on strength because of digital manpower, many other initiatives. If your vision empowers, how would you see your situation between RAM and corporate advances? Currently, we are at 71.5% and 28.5%. How would you visualize if I take a two-year outlook on this portfolio?
See, RAM has its own advantage. Corporate having exposure in the corporate side has also its own advantage. We have given as an ordination that 65/35 is an ideal ratio. To market, I want to give you that we are going to aspire to maintain this ratio in the coming years also. In the RAM sector, this bank has got a very good skill set traditionally also. If you see in the MSME growth rate and agriculture also, growth rate is very good. In that way, this is the strength of this ordination. We are going to build upon this strength. In the corporate side, due to obvious reasons, you know this bank was for the last five years under PCA. Now, capital also supports us. We are going to build, our earlier predecessor also has taken so many good initiatives like they have.
They are going to build a cadre of trade officers. We are continuing with that. This year also, we are going to build a minimum of 1,000 trade officers. On the product side, credit side, those skill sets we are going to actually nurture and prepare them to grow in the corporate side also. That is also a very important emerging area where we have to play an important role. I can assure you this balance of 65/35 would be guiding for us. That is a good combination also for maintaining balance between corporate and RAM.
Sir, if I take the new initiatives which RBI has taken for acquisition finance, share advances, capital market exposure through new IPO-related activities, you have absolutely one of the best franchise where CASA is concerned. You have a reasonably good portfolio on retail led by housing loans and auto loans. If I have to visualize on the margin front, you are doing well on co-lending too. With our RAM being a focus at 65/35, you feel that our margins where we are today, we would start some cross-selling business. We have also acquired Future Generali now as a large shareholder. All these initiatives can cost-to-income and our margins improve from where we stand over if I take a 12-month outlook?
Yeah, very right. Actually, I can assure you if there is improvement in income of INR 50 crore in a quarter, it adds to the reduction of 1% in cost-to-income ratio. If in six months' time, we are able to generate INR 300 crore, then actually a six-point reduction in cost-to-income we can envisage. The kind of initiatives which we are planning and which I have shared with you, there is no reason that with the current scenario, legacy issues are over, which I can show that is the past. The kind of strength Central Bank of India is having now and the vision which I shared with you, I don't find any reason because bancassurance is also new. You see the asset assurance side only. Every quarter, a good number of disbursements are happening. Even through persuasion, even our own assets are insured.
Those are untapped areas through which we can get a good amount of income. There are several emerging sites also, like revisiting our processes, more use of digital tools, and more cost curtailment measures also that we are discussing with our team here. Collectively, if we will work, then that can't be a major challenge in front of us. By March, I can assure you this would be in the range of 54%, 55%, which it used to be. With having a very conservative approach, I am telling you.
Sir, my last question is your outlook on treasury for the year and digital spend amount. What is the likely spend on digital likely to be?
Actually, treasury, you know it depends upon the market forces. As you see, June quarter, it was very good. September quarter, there is a reduction in the trading income to INR 290 crore. There is a reduction in income in this quarter. It depends upon market forces. Based upon the market news and all, I expect that in the coming quarter, treasury is going to support us a lot. Otherwise, I will invite Mr. Mukul to add further to this question.
Yes, Choksey Ji, even though the trading profit has come down, on the reverse side, the coupon income has gone up in treasury. Secondly, what they are doing is with the funds available, they are into, as we are saying, different revenue streams like depo transactions. We are getting a good amount of income out of those transactions and also IPO-related activities. Wherever the opportunity comes, we are tapping those opportunities. We have been able to make a good set of gains. In a recently concluded IPO where a leading company had gone to market, we were able to get a 50% amount as a premium on our total investment.
Yes, Hyundai application, all banks have applied one time and got 50% gain. I understand that.
We are doing it that way. You will see that SDL also has seen recently an uptake. We are getting good coupon in SDL bonds also. Treasury is doing its bit even though they are market-driven, but they are very much agile and they are looking forward for any opportunity to support them.
Mukul, my question was more like what I used to ask Yug. What's your estimated, I'm not asking for the trading number, what is your estimate that GSEC tenure would trade between January and March at what rate? 6.20%, 6.25% because there's a likelihood of a repo cut again coming. That's all I was asking.
Yes, you can assure.
Choksey Ji, you are already in the market. You are very well aware. [Foreign Language] CPI has come down to 1.54%. Even in October print also, which will be even less than 1%. The only thing is core has increased a little bit, but core is mainly contributed by the tremendous improvement in the prices of the precious metals. Excluding gold now, it is 3.3%. It is not, we think there is a benign environment now. Going by the indications given in the various pictures by the Governor, we expect at least one rate cut going forward. The 10-year yield, you know it touched at 6.60%. It should trade around now. We believe now 6.30%, 6.40% range should be the ideal range.
Sir, happy Diwali to Central Bank of India and the team. Best wishes for the year to come. Congratulations and best wishes. Thank you.
Thank you. Happy Diwali to you also. Thank you.
Thank you, sir. Thank you.
Thank you. The next question is from the line of Ashok Ajmera from Ajcon Global Services Limited. Please go ahead.
Thanks for this opportunity. I would rather say, sir, welcome to Kalyan Kumar Ji to Central Bank of India.
Thank you.
Congratulations for the same. Sir, after having come from such a large bank, as Sushil also told about your Union Bank experience and then in Punjab National Bank, and they are also handling the corporate credit in a big way. My first question will be, or rather, you have already explained to some extent. If you look at this quarter's results, the operating profit has gone down tremendously. I can understand that it is on account of not having the proper income from the treasury operations, which has been down from INR 664 crore to INR 186 crore in this quarter from the last quarter. Even if the indirect benefits of the treasury are there, like what Mukul Ji was explaining, ultimately, it should reflect in your operating profit. To me, it should come from the core interest income. For that, you should have a strong corporate book too.
Where I'm coming from is your experience of the corporate. Now, the corporate book in Central Bank of India is going down substantially to almost 28% to 29% only. How long can you rely on RAM? The margin increase and other things. First, your views, you said over a period of time, you would try to make it 65/35. Can I know a little bit of nitty-gritty of it that immediately after now, having you having taken the charge recently, what are your plans to strengthen the, because in Central Bank of India now, we are seeing last few quarters, the credit growth.
You are not audible, Ajmera Ji.
The first session is on that, sir.
Yeah, thank you. Am I audible to you?
Yes, sir. You are audible to me.
Thank you. Actually, really a very pertinent question which you have placed before me. See, I was going through this earnings call also earlier, transcript of that previous time. From there, I came to know, actually, this was a conscious call that time that corporate is not going to be the focus of this organization, looking to that time which was there. That's why I understand the book, if you analyze the corporate book, if you analyze the average credit growth, actually, it is not there. That's why the income, required income, you are very right in your assessment, the required income which should have come, it has not added to the income stream of this quarter, actually, and last quarter also. Another important area which I want to share with you, the repo link-based loan, the composition of loan is also not in favor of Central Bank of India.
Approximately 60% of our advances are linked to repo link-based loan. Due to those transmissions, actually, this benefit has been passed on to the customer. On the deposit side, actually, it was not there that you understand due to contractual agreement and all that that gets repriced. That difference has hit us hard in terms of that. Coming to your main question regarding our vision towards corporate credit, I can assure you, unless we play a big role in the corporate credit side, certainly, the income flow and all these things we can't maintain. Through RAM, actually, the repayment side also will be substantiated with this. That side also we are going to play because that is our strength area. We'll build upon strength. Corporate credit, sorry to say, we have to actually work sincerely, build capabilities. Core cadre is there. Very good team we are having here.
We have to actually give confidence to the customers that, yes, timely decision, we are also a player. That message I have to, we have to give to the corporate customers that, yes, we assure you timely decision would be there. We are in a position, and our capital adequacy ratio is, you know, 17%+ numbers are there. We are in a position to play in this area also significantly. Rightly said by you, having experience of PN B where we were handling actually more than INR 1.13 trillion. There is no question of any hesitation at all. We are going to play, I can assure through your question to the market, that we are going to play an important role in this segment also.
Good, sir. Point well taken, sir, very assuring. Sir, only my second one is on the, you said that we have the return of book of about INR 35,000 crore, if I have heard rightly.
Yes, sir.
Now, have you got the time to plan or to revise the recovery calendar? Like how much from this return of accounts? Because this is something which comes straight to our bottom line. Any trust is being given or required to be given. What kind of a ballpark figure do you expect from this year on year? Maybe 6%, 7%, 8%, or 5% of the total return of book? Could you get time to look at this, sir?
Yeah, yeah. Mukul Ji will add further. He will speak to you.
Ajmera Ji, [Foreign Language] .
[Foreign Language]
Thank you.
INR 35,000 crore is our total TWO book. In the last [Foreign Language] figures [Foreign Language], sir. 2021-2022, we were able to recover only INR 331.52 crore, which increased to INR 1,282.59 crore in the next year, that is 2022-2023. It further went up to INR 1,433.32 crore in 2023-2024. Last year, we could recover INR 1,716.33 crore. This half year itself, we have been able to recover INR 893 crore. Our internal target is that we should cross the figure of INR 2,000 crore as far as the recovery in TWO accounts is concerned during this financial year. This quarter also, we could have seen further upside, but one or two, you know, in NCLT in bigger accounts, [Foreign Language] case [Foreign Language}, [Foreign Language] lag [Foreign Language], then it gets a little bit impacted. We will be crossing INR 2,000 crore for sure.
Yeah, INR 2,000 is good. It will be less than the slippages.
Yeah, 100%. Because that is guidance. Slippages say double [Foreign Language] recovery, minimum.
Sir, when you are there on this, can we talk something on that ECL things now, which is the norms are getting almost clearer now? Have you started making some provision on SMA 1 and 2? What kind of otherwise buffer do we have? What plans do we have to take care of this ECL provisioning when it becomes a norm?
Ajmera Ji, see, RBI released the initial draft on January 16, 2023. Since then, it was engaging our attention. At that point in time, we thought, okay, let us go in a calibrated way. We started making provision for stage 3 NP assets. Our estimate at that point in time was around INR 6,600 crore- INR 7,000 crore of total provision, which would be required based on the ECL guidelines, draft guidelines. Now that we have totally provided for the stage 3 NP assets, we have started providing for the other assets, that is, the standard restructured accounts. Till September 2025, we have made a provision of INR 1,150 crore. Our estimation based on the latest RBI guidelines is that somewhere around INR 3,300 crore-INR 3,500 crore total would be required as additional provision, out of which this INR 1,150 crore has already been made by us.
Our intention, our endeavor is that going forward in the seven quarters, because it will be effective April 1, 2027, the June quarter, it will take effect. Going forward in the seven quarters, we should end up doing the entire provision so that we can transit to the ECL on day one.
No, that's very good. My last question in this round is around that aviation account. Can you give some developments on that? Anything happening on that large account? We had an extra collateral security also with Bank of Baroda sharing with us, and it's a huge amount. Any progress in the last one quarter on that account, and any kind of recovery which we have taken? I know that we have already provided 100% on that.
Ajmera Ji, good afternoon. As of now, there is not much development, but we have published two e-auctions. Further, we are going for another e-auction for this account. This time, we have reached out to many investors or the property builders also. We expect by December end, there would be some e-auction results in our favor. Accordingly, this may be resolved.
I mean, a substantial amount may be recovered from this, isn't it?
Yes, sir. Yes, sir. Yes, sir.
Out of that, I think INR 2,000 crore, INR 2,200 crore, something. This asset itself is INR 1,200 or INR 1,500 crore?
This asset is around INR 1,600 crore. The asset is around INR 1,965 crore. After reduction in the third e-auction, it may come around INR 1,650 crore or what. When we publish the e-auction, we expect this time this may go, I mean, maybe take an over, and we will get the substantial recovery out of this.
Good, sir. Point well taken. Kalyan Kumar Ji, sir, it's a request. Next time, try to have a physical meeting.
Sure.
When we meet in the December quarter for a better interest.
Sure. Thank you.
Okay, sir. Happy Diwali to you all, sir.
Thank you. [Foreign Language] happy Diwali.
Happy Diwali, sir.
Thank you.
Thank you. Before we take the next question, a reminder to everyone, if you wish to ask a question, you may press star and one. The next question is from the line of Nikhil Suresh from Kotak AMC. Please go ahead.
Sir, what is the SMA 0, 1, 2 for the entire loan book list, even the number for INR 5 crore and above?
Yeah.
If you could give the SMA 0, 1, 2. That was my first question.
Yeah. See, SMA 0 total amount as on 30th of September is INR 2,044 crore. SMA 1 is INR 1,377 crore. SMA 2 is INR 2,116 crore. This total is, SMA 0 is only 0.83% of total advances, SMA 1 at 0.47%, and SMA 2 at 0.72%.
Thank you. Is the bank holding excess provisions outside of the standard asset provisions?
Outside standard asset? In what way?
I mean, for the ECL buffer.
Required as per the IREC.
Okay. No excess provisions?
You mean that any additional provision than what is required as per IREC norms?
Yes, that's right.
See, the standard restructured book, wherever 5%, 10%, or even 15% provision was required, that we are holding over and above this INR 1,150 crore that we have provided for standard assets as per the ECL requirement. In total, around 0.94% of provision on standard assets we are holding.
Okay, sir. Thank you. Thank you.
Does that answer his question, Mr. Nikhil? A reminder to everyone, if you wish to ask a question, you may press star and one on your touchstone phone. We will wait for the moment. As there are no further questions from the participants, I now hand the conference over to the management of Central Bank of India for closing comments. Over to you, sir.
Thank you. It was a good interaction and good opportunity to share the vision of Central Bank of India with all of you. I assure you through this medium that in the coming quarters, you will see very sustained and continuous improvement in all the areas of improvement. Certainly, we are going to build upon in the area of strength which Central Bank of India is having. With this, thank you for patient hearing. I also wish you all happy Diwali. Thank you.
All right. Okay. Disconnect?
Thank you, everyone. On behalf of Central Bank of India, that concludes this conference. Thank you for joining us. You may now disconnect your line.