On Thursday the share price of a midcap company rose by 3.6 percent to its intraday high of Rs 50.85 per share from its previous close of Rs 49.05 per share after the bank announcement of strategic partnership with a private limited for MSME Loans.
According to the filing, the Central Bank of India has collaborated with M/s. Kisetsu Saison Finance, an NBFC with over Rs. 8200 crore in assets, provides competitive Micro, Small & Medium Enterprises (MSME) loans.
The 80/20 co-lending agreement involves the Central Bank assuming the majority of each loan while Kisetsu Saison originates and services them, thereby expanding its reach and the Central Bank’s portfolio.
Looking at the financials of the Central Bank of India, net revenue decreased by 19.2 percent year on year, from Rs 6,184 crore in Q2FY23 to Rs 7,377 crore in Q2FY24. Their revenue rose 1.6 percent sequentially from Rs 7,259 crore in Q1FY24 to the current levels.
Furthermore, the company’s net profit increased by 81 percent year on year, from a net profit of Rs 344 crores in Q2FY23 to a net profit of Rs 623 crores in Q2FY24. Their profit increased by 25 percent sequentially from Rs 498 crore in Q1FY24 to current levels.
The bank has a CASA ratio of 50, a return on equity of 6 percent, a return on capital employed of 8 percent, and a net profit margin of 6 percent. Working capital requirements have also been reduced from 57.5 to 32.1 days.
Central Bank of India is a midcap stock with a market capitalization of Rs 44,040 crores. The share price has risen by 74 percent in the last six months and 56 percent in the year to date.
The promoter owns 93 percent of the company, 4 percent is owned by the general public, 0.2 percent is owned by a foreign institutional investor, and 2.8 percent is owned by domestic institutional investors.
The Central Bank of India operates as a commercial bank. Treasury Operations, Corporate/Wholesale Banking, Retail Banking, and other Banking businesses are among the segments of the bank. Treasury Operations include dealing in government and other securities, as well as money market and forex operations.
Written by Sriram KV
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