Investment Rationale: Central Bank of India Ltd (₹36.96)...

Introduction:

Central Bank of India, one of India’s oldest public sector banks, was established in 1911 as India's first commercial bank wholly owned and managed by Indians, Central Bank of India (CBI) was founded with a strong nationalistic ethos, envisioned as "the property of the nation and the country's asset." Photo: The Financial Express.

CBI operates as a significant public sector commercial bank with a pan-India presence, boasting a vast network of branches and ATMs serving diverse clients, from individuals to large corporations, with a comprehensive suite of financial products and services. Nationalized in 1969, CBI continues its legacy as a key institution deeply rooted in serving the Indian financial landscape.

It has recently delivered an impressive performance in Q4 FY25. With a steady improvement in asset quality, profitability, and forward-looking capital strategies, the bank is regaining investor confidence. Its latest financials reflect a solid turnaround story, making it a noteworthy contender for global investors eyeing India’s banking growth story.

Q4 FY25 Highlights

• Strong Profit Growth: Net profit jumped 41.1% year-on-year to ₹807 crore in Q4 FY25, compared to ₹571 crore in the same quarter last year.
• Robust Interest Income: Interest income rose to ₹8,337 crore from ₹7,144 crore, indicating healthy credit growth.
• Asset Quality Improvement: Gross NPA fell to 4.5% (from 8.44% YoY), and Net NPA declined to 1.23% (from 1.77% YoY), showcasing better recovery and risk management.
• High Provision Coverage: Provision Coverage Ratio (PCR) improved to 93.58%, strengthening the bank’s financial buffer.
• Healthy Capital Position: The Capital Adequacy Ratio stood at 15.08%, providing room for future lending growth.
• Capital Raising Plan: The bank plans to raise up to ₹5,000 crore through various routes like FPO, QIP, rights issue, and Basel III bonds—signaling ambition for sustained expansion.

Conclusion:

Central Bank of India’s Q4 FY25 performance confirms its transition from a legacy PSU bank to a modern, growth-oriented institution. With improved profitability, stronger balance sheets, and a capital infusion plan in place, the bank is poised to benefit from India’s evolving credit cycle. For international investors looking at stable, government-backed financial plays in emerging markets, this stock offers an attractive value proposition at current levels.