Central Bank of India Reports Profit Drop Amid Tax Provision Impact

The Central Bank of India reported a significant dip in its quarterly profit due to increased tax provisions. While net interest income rose, treasury income saw a decline. The bank is targeting growth through new branches and enhanced bancassurance channels, expecting to offset non-interest income reductions.

The Central Bank of India, a state-owned enterprise, disclosed a 32.5% decline in its consolidated net profit for the March quarter, primarily due to a one-time tax provision impact. The profit drop stands at Rs 745.72 crore, marking a 41.6% decline from the preceding December quarter.

According to Kalyan Kumar, the bank's Managing Director and Chief Executive, the bank's profits were severely impacted by Rs 632 crore in deferred tax assets recognized under new finance bill provisions. Despite a fall in non-performing asset provisions and write-backs contributing positively, overall provisions still surged by 41.59%.

The bank highlighted a 17.74% year-on-year increase in core net interest income, paired with improving net interest margins. However, non-interest income suffered a sharp dip, driven down by reduced treasury income. Future growth is forecasted through the new Gift City branch, expected to bolster non-interest income alongside bancassurance channels.