Central Bank Of India Stock Jumps 5% After Declaration Of Go First Loan As NPA

Central Bank of India reported a robust 90.25 per cent year-on-year increase in net profit, amounting to Rs 605 crore, during Q2FY24.
Go First aircrafts at Mumbai airport
Go First aircrafts at Mumbai airport

Central Bank of India's stock price witnessed an increase of almost 5 per cent on Wednesday after the bank categorized its Rs 2,000-crore loans to Go First as non-performing assets (NPAs) in the quarter ending in September 2023.

The public sector lender's exposure includes government-backed emergency credit for the troubled airline, Go First. In addition to the Central Bank of India, Go First also has a financial connection with another state-owned lender, Bank of Baroda.

At 12:30 pm, the shares of the banking firm were trading at Rs 42 price level, up by almost a point on the National Stock Exchange.

During a Q2 analyst call, the Central Bank of India revealed they had initially made provisions for a major corporate account, Go First, under standard assets, in anticipation of future issues. Now that the account is classified as an NPA, the provision has been written back, resulting in a 100 per cent provision. Go First has been in insolvency proceedings since May 2023 and stopped operating flights on May 3.

In the quarter spanning July to September, the Central Bank of India reported a robust 90.25 per cent year-on-year increase in net profit, amounting to Rs 605 crore. Its net interest income (NII) witnessed a growth of 10.23 per cent compared to the previous year, reaching Rs 3,028. The net interest margin (NIM) for this quarter was recorded at 3.43 per cent, slightly lower than the 3.44 per cent in the same quarter of the prior fiscal year.

On a year-to-date basis, the shares of the Central Bank of India have soared to more than 32 per cent or 10 points on the National Stock Exchange.

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