Summary
Central Bank of India - Q3 FY 2026 Earnings Call Summary Friday, January 16, 2026, 4:00 PM IST
Event Participants
Executives 5 E Ratan Kumar (Executive Director), Kalyan Kumar (MD & CEO), Mahendra Dohare (Executive Director), Mukul Dandige (CFO), M. V. Murali Krishna (Executive Director)
Analysts 6 Ashlesh Sonje (Kotak Securities), Ashok Ajmera (Ajcon), Debansu Gupta (Eureka Stock & Share Broking), Ishank Gupta (Choice Institutional Equities), Nishita (Sapphire Capital), Varun (Share India Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Deposits | ₹4.50 lakh crores | +13.24% YoY; Term deposits grew >18%, while CASA grew 8.54%. |
| Total Advances | ₹3.23 lakh crores | +19.48% YoY; Driven by 23.18% growth in Corporate and 17.89% in RAM. |
| CD Ratio | 72% | +375 bps YoY; Management targeting 73-74% for Q4 FY26. |
| GNPA | 2.70% | -116 bps YoY; Absolute GNPA stands at ₹8,726 crores. |
| NNPA | 0.45% | -14 bps YoY; Absolute NNPA stands at ₹1,414 crores. |
| PCR (incl. TWO) | 96.69% | Remains one of the highest in the sector, reflecting balance sheet resilience. |
| Net Profit | ₹1,263 crores | +31.70% YoY; All-time high quarterly profit despite proactive provisioning. |
| NIM | 2.96% | Slightly below 3% guidance due to 125 bps repo rate cut impact. |
| Slippage Ratio | 0.25% | Significant improvement; Nine-month slippages totaled ₹1,865 crores. |
| Credit Cost | 0.37% | Maintained at low levels; sequential increase due to intentional provisioning. |
| ROA | 1.01% | Successfully met guidance of maintaining ROA above 1%. |
| Capital Adequacy | 16.13% | CET1 at 13.87%; Management deems capital sufficient for current growth. |
Geographic & Segment Commentary
- RAM (Retail, Agri, MSME): This segment constitutes the core strength and represents a 65:35 ratio vs Corporate. Retail grew 20-21% and Agri 15%, supported by an outreach program at 100+ locations.
- Corporate: Grew 23.18% YoY to ₹1.00 lakh crores. Management focuses on high-rated corporates and emerging sectors like renewable energy, data centers, and road infrastructure.
- MSME: Growth of 16% was slightly below expectations; the bank has identified 225 intensive branches in active clusters and launched cluster-specific products to accelerate Q4 performance.
Company-Specific & Strategic Commentary
- Digital Transformation: Launched “Cent eeZ” super app and “GoNoGo” app for automated credit underwriting to filter potential bad loans at the entry stage.
- Liability Strategy: Initiated the “Aagaz” campaign targeting ₹20,000 crore in CASA mobilization through segmented products for defense, pensioners, and housewives.
- Asset Quality Management: Implemented an integrated call center and “feet-on-street” model combined with technological recovery bots to maintain low slippages.
- Operational Efficiency: Cost-to-income remains high at 57.84%; management targets a 50-100 bps reduction annually, aiming for sub-50% in three years.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Advances | ₹3.40 lakh crores by March 2026 | Driven by undisbursed sanctions of ₹1.17 lakh crores from Head Office. |
| NIM | 3.00% for FY26 | To be supported by CD ratio improvement and high-yielding RAM growth. |
| CD Ratio | 73% - 74% for Q4 FY26 | Based on current sanction pipelines and credit demand. |
| ECL Provisioning | ₹4,200 crores (Total Target) | ₹1,525 crores already provided; balance to be covered by April 2027. |
| ROA | >1.00% | Strategy to maintain profitability through yield management and cost control. |
Risks & Constraints
| Risk | Context |
|---|---|
| Margin Compression | 60% of the loan book is repo-linked, leading to immediate yield repricing following rate cuts, while deposit costs lag. |
| Asset Quality in Small Tickets | KCC (Agri) and MUDRA (MSME) remain primary contributors to slippages, requiring tighter digital underwriting. |
| High Cost-to-Income | At 57.84%, the bank lags peers; reduction is dependent on long-term digital adoption and revenue diversification. |
Q&A Highlights
Provisioning Strategy
- Question: Why did provisions increase this quarter despite stable asset quality? (Ashok Ajmera)
- Answer: The bank proactively provided ₹375 crores for ECL transition and ₹150 crores for employee terminal dues/Labor Code adjustments to build buffers (Kalyan Kumar).
Recovery Outlook
- Question: What is the recovery expectation for Q4 FY26? (Nishita)
- Answer: Total recovery and upgradation target for Q4 is ₹904 crores, following a strong ₹1,021 crore recovery in Q3 (Kalyan Kumar).
Deposit Repricing
- Question: When will the cost of deposits settle following the rate cuts? (Ishank Gupta)
- Answer: Transmission lags mean major repricing will complete by June 2026; cost of deposits is expected to settle in the 4.50%-4.55% range (Mukul Dandige).
Key Takeaway
Central Bank of India reported a resilient Q3 FY26 with an all-time high net profit of ₹1,263 crores, supported by robust 19.48% YoY credit growth and superior asset quality (NNPA at 0.45%). While the Bank met 8 out of 11 key guidance metrics, NIM (2.96%) and Cost-to-Income (57.84%) remain pressured by interest rate cycles and legacy costs. Strategically, the Bank is pivoting toward a “Digital First” approach with the GoNoGo app for underwriting and the Aagaz campaign for CASA growth. Management remains confident in achieving a ₹3.40 lakh crore credit book by fiscal year-end, supported by a healthy 16.13% capital adequacy and a targeted CD ratio of 74%. The primary watch-point remains the pace of deposit repricing to protect margins through FY27.
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