scorecardresearchCentral Bank pulled out of PCA framework, stock skyrockets 14%

Central Bank pulled out of PCA framework, stock skyrockets 14%

Updated: 21 Sep 2022, 11:30 AM IST
TL;DR.
Shares of Central Bank Of India opened at 23.10 and hit an intraday high of 23.40 and a low of 21.80.
The Central Bank of India was placed under the PCA framework in June 2017 due to its high net non-performing assets (NPAs) and poor return on assets.

The Central Bank of India was placed under the PCA framework in June 2017 due to its high net non-performing assets (NPAs) and poor return on assets.

Shares of Central Bank Of India jumped 13.51 percent on 21st September after RBI pulled the bank out of the Prompt Corrective Action Framework (PCAF) watchlist.

The stock opened at 23.10 and hit an intraday high of 23.40 and a low of 21.80.

During Wednesday's intraday, the Central bank of India recorded a volume of 46.2 million both in NSE and BSE, a 5.96 times surge over its average weekly volume of 7.0M.

Additionally, the stock gained 26.2 percent from its price of Rs. 18.30 in past one month.

The stock touched a 52-week-high of Rs. 25.15 on 30th September 2021 and a 52-week-low of Rs. 16.25 on 1st July 2022, indicating that at the current level, the stock is trading at Rs. 5.75 above its 52-week low.

Article
Shares of Central Bank of India since past six months.

Following improvements in a number of indicators and a formal pledge that the state-owned institution will abide by the minimum capital rules, Central Bank of India has been removed from the Prompt Corrective Action Framework (PCAF) watchlist, RBI said on Tuesday.

Prompt Corrective Action is a framework under which financial institutions with weak financial indicators are put under watch by the RBI. It considers four variables while deciding whether to subject a bank to the PCA framework. These include financial performance, asset quality, capital ratios, and debt level.

The Central Bank of India was placed under the PCA framework in June 2017 due to its high net non-performing assets (NPAs) and poor return on assets.

The Bank's performance was examined by the Board for Financial Supervision, according to a statement from the RBI, and it was highlighted that the bank was not in violation of the PCA parameters based on the evaluated numbers for the year ending March 31, 2022.

Following a loss in FY15, the bank turned the turnaround in FY22 and reported a full-year profit. In the fiscal year, it recorded a profit of 1,045 crore. In comparison to the same quarter the year before, it recorded a 14.2 percent increase in net profit for the June quarter, coming in at 234.78 crore as opposed to 205.58 crore.

In comparison to the same time last year, the gross NPA ratio decreased to 14.9 percent of gross advances from 15.92 percent. Additionally, Net NPAs decreased from 5.09 percent in the first quarter of the prior fiscal year to 3.93 percent in that period.

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First Published: 21 Sep 2022, 11:30 AM IST