CENTRAL BANK 2023-24 Annual Report Analysis

Tue, 25 Jun

CENTRAL BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

CENTRAL BANK Income Statement Analysis

• Interest income during the year rose 20.2% on a year-on-year (YoY) basis.
• Interest expenses were up by 28.6% YoY during the same period.
• Operating expenses increased by 15.3% YoY during the year.
• The bank's net interest income (NII) increased by 10.3% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 3.3% in FY24 as against 3.5% in FY23.
• Other income increased by 15.4% YoY during the year.
• Net profit for the year increased by 58.9% YoY.
• Net profit margins during the year increased to 8.6% in FY24 from 6.5% in FY23.

CENTRAL BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	256,571	308,489	20.2%
Other Income	Rs m	40,845	47,131	15.4%
Interest Expense	Rs m	139,051	178,824	28.6%
Net Interest Income	Rs m	117,520	129,666	10.3%
Operating Expense	Rs m	89,100	102,749	15.3%
Pre-provision Operating Profit	Rs m	69,265	74,047	6.9%
Provisions & Contingencies	Rs m	53,172	48,287	-9.2%
Profit before tax	Rs m	26,725	40,803	52.7%
Tax	Rs m	10,631	15,043	41.5%
Profit after tax	Rs m	16,788	26,677	58.9%
Minority Interest	Rs m	-96	-89	7.1%
Net Interest Margin	%	3.5	3.3
Net profit margin	%	6.5	8.6

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CENTRAL BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 3,855.4 bn as compared to Rs 3,597.8 bn in FY23, thereby witnessing an increase of 7.2%.
• Advances for the year stood at Rs 2,444.0 bn as compared to Rs 2,038.9 bn during FY23, a rise of 19.9%.
• Cost of deposits for CENTRAL BANK rose 17.8% and stood at 4.4%, while yield on advances rose to 8.1%.
• The lender's investments rose to Rs 1,440.1 bn during the year from Rs 1,365.7 bn in FY23.
• Borrowing stood at Rs 200.1 bn, a growth of 140.1% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 4,477.7 bn as against Rs 4,070.8 bn during FY23, thereby witnessing a rise of 10.0%.

CENTRAL BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	292,167	323,744	10.8%
Advances	Rs m	2,038,933	2,443,993	19.9%
Deposits	Rs m	3,597,751	3,855,408	7.2%
Yield on advances	%	7.4	8.1
Cost of Deposits	%	3.7	4.4
Investments	Rs m	1,365,694	1,440,100	5.4%
Borrowings	Rs m	83,339	200,129	140.1%
Total Assets	Rs m	4,070,797	4,477,716	10.0%

Current Valuations for CENTRAL BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 3.1, an improvement from the EPS of Rs 1.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 64.2, stands at 16.4 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.7 times, while the price to income ratio stands at 1.4 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	29.6	35.5
Earnings per share (Unadj.)	Rs	1.9	3.1
Diluted earnings per share	Rs	1.9	3.1
Avg P/E ratio	Rs	15.0	16.4
Avg P/ABV ratio	Rs	0.8	1.7
Avg Market Cap	Rs	251,313	437,476
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for CENTRAL BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 63.4x during FY24, from 56.7x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 12.53x during FY24, from 12.60x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): CENTRAL BANK's capital adequacy ratio (CAR) was at 15.1% as on 31 March 2024 as compared to 14.1% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 8.2% during FY24, from 5.7% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 0.60% during FY24, from 0.41% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 11.15% during FY24, from 8.66% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. CENTRAL BANK's gross NPA ratio stood at 4.5% as of 31 March 2024 compared to 8.4% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of CENTRAL BANK was 1.2% in financial year 2024. This compared with 1.8% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	56.7	63.4
Debt to Equity Ratio	x	12.6	12.5
Loans / Deposits	x	0.0	0.1
Capital Adequacy Ratio	%	14.1	15.1
Return on Equity	%	5.7	8.2
Return on Assets	%	0.4	0.6
Return on Capital Employed	%	8.7	11.1
% of Gross NPAs	%	8.4	4.5
% of Net NPAs	%	1.8	1.2
Yield on Advances	x	7.4	8.1
Yield on Investments	x	6.6	7.0

To see how CENTRAL BANK has performed over the last 5 years, please visit here.

CENTRAL BANK Share Price Performance

Over the last one year, CENTRAL BANK share price has moved up from Rs 27.9 to Rs 64.2, registering a gain of Rs 36.2 or around 129.6%.

Meanwhile, the S&P BSE BANKEX is trading at 58,710.0 (up 0.0%). Over the last one year it has moved up from 49,292.3 to 58,710.0, registering a gain of 9,417.7 points (up 19.1%).

Overall, the S&P BSE SENSEX is up 21.8% over the year.

(To know more, you can check out historical annual results for CENTRAL BANK here and quarterly results for CENTRAL BANK here)