Central Bank of India — Credit Ratings, 04-12-2024: Credit Rating

Central Bank of India has reaffirmed its credit rating of A1+ for its ₹10,000 crore Certificate of Deposit program by CARE Ratings. This reflects the bank's majority ownership by the Government of India (GoI), which has provided significant financial support amounting to ₹21,835 crore between FY16 and FY23. The bank's capital adequacy ratio stood at 16.27% as of September 30, 2024, slightly improving from 15.08% in the previous period, though it remains below that of larger peers.

Despite improvements in asset quality, with gross non-performing assets dropping to 4.59% from 21.48% in March 2018, the bank continues to face challenges. Profitability has seen a marked increase, with profit after tax rising to ₹2,549 crore in FY24 from ₹1,582 crore in FY23, indicating a notable turnaround. However, ROTA remains moderate compared to competitors at 0.61% for FY24.

The outlook for Central Bank of India appears stable, supported by a strong liquidity position and a diversified advances profile, but ongoing asset quality monitoring and effective capital management will be crucial for maintaining its current credit strength. This reaffirmation is expected to keep borrowing costs in check while positively influencing investor sentiment.