MUMBAI, June 25: Central Bank of India has posted an over 16 per cent jump in its net profit to Rs 175 crore in 1997-98, compared with Rs 151 crore in the previous year. The Mumbai-based public sector bank, which recorded a net profit for the second consecutive year, has sought the finance ministry's permission to not pay dividend for the year.The bank's operating profit has increased by over 28 per cent to Rs 339 crore in 1997-98 from Rs 264 crore in 1996-97.
The Rs 175-crore net profit does not include the Rs 95 crore worth of writeback of depreciation on investments, Central Bank chairman-cum-managing director KC Chowdhary said. The net profit of 1996-97 had included writeback of depreciation of Rs 78 crore on investments.
The bank's net non-performing assets (NPAs) have gone up from Rs 1,267 crore to Rs 1,305 crore in 1997-98. However, in percentage terms, the net NPA has gone down from 14.40 per cent to 12.21 per cent. ``The bank has written off Rs 49 crore during the year,'' Chowdhary said. Thebank has marked to market 80.16 per cent of its investment portfolio in March 1998, up from 61.39 per cent in March 1997.
Its capital adequacy ratio went up from 9.41 per cent to 10.40 per cent during the year as its net worth rose from Rs 1,090 crore to Rs 1,622 crore, thanks to revaluation of the fixed assets to the tune of Rs 361 crore.
Chowdhary attributed the rise in the net profit to increasing income from trading in government securities, lower provisioning requirement and containing the cost of funds by pushing up the quantum of savings deposits. It has been able to maintain its net spread at 3 per cent.
The bank has recorded a total income of Rs 3,184 crore while the total expenditure is pegged at Rs 2,824 crore during the year. The bank's deposits during the year increased by Rs 3,322 crore to Rs 26,373 crore and credit went up by Rs 1,888 crore to Rs 10,678 crore.
On the bank's restructuring, Chowdhary said that the bank did not accept the recommendations of international consultants KPMGas they were found to be inappropriate in the Indian context. Subsequently, Icra was appointed and it submitted its report in March 1998.
Some of the recommendations made during the course of Icra's interactions with the bank officials have already been implemented and one of the visible results is the profits made in trading in government securities in 1997-98, he said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
