Central Bank has bounced back from the red by posting a net profit of Rs 150.83 crore for the year-ended 1996-97. Spurred on by a 17 per cent growth in income, the bank's operating profit amounted to Rs 263.59 crore as against Rs 178 crore in the previous year. The bank had posted a net loss of Rs 73.53 crore in 1995-96. It has managed to achieve a capital adequacy of 9.4 per cent.
It has taken advantage of the excess provision on the investment portfolio and took benefit for Rs 77 crore, thereby boosting profits. S Doreswamy, chairman and managing director, Central Bank, said the bank is targeting an operating profit of Rs 350 crore and a net profit of Rs 200 crore in the current fiscal. The bank has marked 61 per cent of its investment portfolio to the market. Total deposits stood at Rs 23,051 crore, an increase of 16.7 per cent. There was however no growth in total advances with the outstanding credit at Rs 8,790 crore. In the current fiscal it is targeting a deposit growth of 17 per cent and credit growth of 14 per cent.
Doreswamy said the accumulated losses of the bank stood at Rs 1100 crore and it might approach the government for writing this amount off against the capital. He added the bank is on the verge of turning the corner and all its problems are now history. While the yields on advances have improved from 12.34 per cent to 13.05 per cent, the cost of deposits moved up from 7.33 per cent to 8.07 per cent during the last fiscal. For 1996-97, the net spread stood at 3.67 per cent while interest spread was 3.1 per cent. Doreswamy said the thrust in the current year will be on asset recovery. The net performing assets of the bank stood at 14 per cent of total advances. The bank provided Rs 174 crore last year in form of provisions against Rs 138 crore in 1995-96.
More From This Section
Central Bank is restructuring its branch network and classifying them into four categories - deposit mobilisation, priority sector advances, corporate finance and recovery branches. The Mumbai branch of Central Bank is also being restructured.
The bank has marked 61 per cent of its investment portfolio to the market. Total deposits stood at Rs 23,051 crore, an increase of 16.7 per cent. There was,
however, no growth in total advances with the outstanding credit at Rs 8,790 crore.