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Central Bank of India — Q4 FY26
Central Bank of India reported a mixed Q4 FY26.
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Central Bank of India reported a mixed Q4 FY26. Total business grew 15.6% to ₹8.12 lakh crore, with advances up 18.76% and CASA at 47.3%. Net profit fell to ₹724 crore (down 46% YoY) due to a one-time DTA impact of ₹632 crore from tax regime transition. Excluding this, adjusted PAT was ~₹925 crore. NIM improved 30bps QoQ to 3.07%, aided by an income tax refund. Asset quality improved: GNPA down 51bps YoY to 2.67%, slippage ratio improved to 1.16%. Management guided for 14-16% credit growth and NIM above 3% in FY27. Key risk: elevated slippages in Q4 due to audit-driven technical downgrades in MSME/agriculture.
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Elevated Q4 slippages due to audit-driven downgrades
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Gross NPA
2.67%
-51bps YoY
Improved asset quality; absolute GNPA stood at ₹9,185 crore.
Slippage Ratio
1.16%
-29bps YoY
Full-year slippage ratio improved from 1.45% in FY25.
CASA Ratio
47.30%
+0.3pp YoY
CASA deposits grew 9.75% YoY; savings deposits crossed ₹2 lakh crore.
RAM Share
68%
+3pp YoY
Retail, agriculture & MSME grew 21% YoY; retail alone grew 25.67%.
What Changed vs Last Quarter
NEW
Credit growth of 14-16% in FY27
Management expects advances to grow 14-16% in FY27, supported by strong capital adequacy (CRAR 17.91%) and outreach programs.
NEW
Deposit growth of 10-12% in FY27
Deposits are guided to grow 10-12% in FY27, with continued focus on CASA mobilization.
NEW
NIM to remain above 3% in FY27
Net interest margin is expected to stay above 3% in FY27, supported by strong CASA base and RAM focus.
NEW
Slippage ratio to be less than 1% in FY27
Management targets slippage ratio below 1% in FY27, down from 1.16% in FY26.
DROPPED
Credit growth target of ₹3.40 lakh crore by March 2026
Management expects total advances to reach ₹3.40 lakh crore by Q4 FY26, driven by strong sanctions and disbursements.
DROPPED
CD ratio to reach 73-74% by Q4 FY26
The bank aims to improve its credit-deposit ratio to 73-74% by March 2026, up from 72% in Q3.
DROPPED
Cost of deposits to decline to 4.5-4.55% by June 2026
With repricing of term deposits and Kasa campaign, cost of deposits is expected to fall to 4.5-4.55% by June 2026.
DROPPED
NIM to be maintained at 3%
Despite rate cuts, management expects to sustain NIM at 3% through Kasa growth and RAM focus.
NEW RISK
Elevated Q4 slippages due to audit-driven downgrades
Q4 slippages rose to ₹1,310 crore vs ~₹800 crore average, attributed to technical downgrades in MSME and agriculture during audits.
NEW RISK
ECL implementation impact on profitability
Transition to ECL norms from April 2027 may require additional provisions of ₹600-650 crore annually, though management expects to offset via tax savings.
NEW RISK
NIM pressure from external benchmark-linked advances
61% of advances are linked to external benchmarks, causing yield compression; deposit repricing lag may pressure margins.
NEW RISK
Lumpy airline account recovery uncertainty
Recovery from a large airline NPA is ongoing; only ₹515 crore guarantee received so far, with auction process underway.
RISK GONE
Margin compression from repo rate transmission
125 bps repo rate cut will pressure NIM as loan repricing is immediate while deposit repricing lags.
RISK GONE
Elevated provisions for ECL transition
Remaining ₹2,675 crore ECL provision required by April 2027 could impact profitability.
RISK GONE
Higher slippages in agriculture and MSME segments
Gross NPA in agriculture and MSME remains around 5%, with KCC and government schemes contributing to slippages.
RISK GONE
Cost-to-income ratio above guidance
Cost-to-income at 57.84% missed the 56% target; management expects it to take 3 years to fall below 50%.
Fast read
Guidance and risk preview
Management expects advances to grow 14-16% in FY27, supported by strong capital adequacy (CRAR 17.91%) and outreach programs.
Q4 slippages rose to ₹1,310 crore vs ~₹800 crore average, attributed to technical downgrades in MSME and agriculture during audits.
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