Central Bank of India soars over 10% after RBI's nod on insurance foray

Shares of Central Bank of India soared up to 10.56 per cent to hit an intraday high of Rs 57.86 a piece on Monday after the public sector bank received Reserve Bank of India’s (RBI) nod to enter into insurance business.

 

“We would like to inform that the Reserve Bank of India (RBI) vide its letter dated 21st November, 2024 has approved the Banks entry in the Insurance Business through a joint venture with Generali group under FGIICL and FGILICL, subject to continuous compliance of conditions stipulated by it and approval of IRDAI, the Sectoral Regulator,” the PSU bank said in an exchange filing on Friday.

 

 

In October, the Competition Commission of India (CCI) approved the Central Bank of India's proposed acquisition of stakes in Future Generali India Insurance Company Ltd (FGIICL) and Future Generali India Life Insurance Company Ltd (FGILICL). 

 

FGIICL offers personal insurance, commercial insurance, social, and rural insurance, while FGILICL provides savings insurance, investment plans (ULIPs), term insurance, health insurance, child plans, retirement plans, rural insurance, and group insurance plans. 

 

Earlier in August, the Central Bank of India announced it had successfully bid for the stake acquisition of Future Enterprises Ltd (FEL) in the life and general insurance venture.

Q2FY25 results

Public sector lender Central Bank of India reported a 50.91 per cent year-on-year (Y-o-Y) increase in net profit for the second quarter ended September 2024 (Q2FY25), reaching Rs 913 crore. The growth was driven by higher net interest income (NII) and recoveries from written-off accounts. On a sequential basis, the bank's net profit rose by 3.75 per cent from Rs 880 crore in June 2024 (Q1FY25).

 

The bank’s NII grew by 12.62 per cent Y-o-Y to Rs 3,410 crore in Q2FY25, compared to Rs 3,028 crore in the same quarter last year. Additionally, the bank's net interest margin (NIM) improved to 3.44 per cent in Q2FY25, up from 3.29 per cent in Q2FY24.

Central Bank of India share price history

The bank’s stock performance has been in line with the market year to date as it has risen 11 per cent, while gaining 27 per cent in the last one year. In comparison BSE Sensex has risen 11 per cent year to date and 21 per cent in a year. 

 

The bank has a total market capitalisation of Rs 48,830.28 crore. Central Bank of India shares are trading at a price to earnings multiple of 10.36 times and at an earning per share of Rs 5.05. 

 

At 11:43 AM; the shares of the company were trading 7.51 per cent higher at Rs 56.26 a piece. By comparison, the BSE Sensex was up 1.57 per cent at 80,355.56 level.