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Central Bank of India writes off ₹7856cr in Q1

July 18, 2023

Central Bank of India writes off ₹7856cr in Q1
Central Bank of India reported a sharp reduction in bad loans during the April-June quarter, which analysts said was aided primarily by significant write-offs.

The state-owned lender’s gross non-performing assets (NPA) fell to 4.95 percent of advances compared with 14.9 percent in the year-ago quarter. The bank wrote off ₹7,856 crore of loans in the April-June quarter, Central Bank said July 17.
 
Net NPAs narrowed to 1.75 percent against 3.93 percent a year earlier.
 
Banks write off loans when there is no scope of recovering them from borrowers. Typically, banks need to set aside 100 percent of the written-off loan amount as provisions, which impacts profitability.
 
The gross NPA ratio was the lowest since 4.8 percent in March 2013 and the net NPA was the lowest since 1.37 percent in September 2011, according to Bloomberg data.
 
In absolute terms, gross NPAs fell to ₹10,891 crore at the end of June from ₹29,002 crore in the same quarter last year. Net NPAs were at ₹3,718 crore on June 30, compared with ₹6,785 crore a year earlier.
 
The provision coverage ratio was 92.23 percent, an improvement of 562 basis points (bps) on year. One basis point is one-hundredth of a percentage point.
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