Central Bank of India Q3 Business Jumps 15.8% YoY, Driven by Strong Loan Growth

Central Bank of India Q3 Business Jumps 15.8% YoY, Driven by Strong Loan Growth

Central Bank of India posted a sharp 15.8% year‑on‑year jump in total business to ₹7.74 lakh crore as of December 31, 2025, powered by 19.57% growth in gross advances to ₹3.24 lakh crore amid robust credit demand. Deposits expanded a healthy 13.23% to ₹4.51 lakh crore, though CASA ratio dipped to 47.12%, highlighting trade‑offs between funding growth and cost pressures ahead of full Q3 results on January 19.​

Q3 FY26 Provisional Business Snapshot

Metric	Q3 FY26 (Dec 25)	YoY Growth	QoQ Growth	YTD Growth
Total Business	₹7,74,309 Cr	+15.8% ​	+10.18%	+10.18%
Gross Advances	₹3,23,773 Cr	+19.57% ​	+11.61%	+11.61%
Deposits	₹4,50,536 Cr	+13.23% ​	+9.17%	+9.17%
CASA Deposits	₹2,11,745 Cr	+8.53% ​	N/A	N/A
CASA Ratio	47.12%	-206 bps ​	N/A	N/A
Credit‑Deposit Ratio	72.06%	+381 bps ​	+153 bps	N/A

• Advances outpaced deposits significantly, lifting CD ratio to a multi‑year high of 72.06% (up 381 bps YoY), as the bank aggressively deployed liquidity into high‑yield loans.​

• CASA growth lagged at 8.53% YoY, with ratio slipping 206 bps to 47.12%, reflecting faster bulk/term deposit accretion amid system‑wide competition for low‑cost funds.​

Drivers of Strong Loan Book Expansion

• Retail/MSME Surge: Festive season tailwinds, GST rate cuts, rural recovery and RBI’s priority sector push fuelled housing, vehicle, MSME and personal loan growth, outpacing corporate advances.​

• System Credit Momentum: Banking system credit up ~11.7% YoY (Dec 12 data), with public sector banks like Central Bank gaining share through targeted lending and digital onboarding.​

• Strategic Deposit Mix: Added ~₹38,000 crore deposits QoQ via branch expansion and digital campaigns, funding the 19.6% advance leap without liquidity strain.​

Q2 FY26 Context: Profitability Amid NIM Squeeze

Metric (Q2 FY26)	Value	YoY Change
Net Interest Income	₹3,282 Cr	-3.7% ​
Net Profit	₹1,213 Cr	+32.8% ​
Gross NPA	3.01%	-158 bps ​
Net NPA	0.48%	-1 bps
PCR	96.88%	Strong buffer

• Q2 profit jumped 32.8% YoY to ₹1,213 crore despite NII dip, thanks to treasury gains, lower provisions and stable NPAs; Q3’s advance surge bodes well for topline recovery if margins stabilise.​

• NIM pressure from CASA moderation and higher deposit costs persists, but anticipated RBI rate cuts and MCLR revisions could aid Q3/Q4 rebound.​

Strategic Insights and Segment Focus

• Retail Push: Bank’s digital platforms and MSME schemes capitalised on festive/rural demand; unsecured retail growth accelerates but invites NPA watch.​

• Corporate Selectivity: Focused on infra, capex‑linked corporates to balance yield and risk, aligning with govt’s ₹11 lakh crore FY26 budget push.​

• Deposit Strategy: CASA dip reflects bulk deposit reliance for CD ratio expansion; management likely prioritises growth over mix in current cycle.​

Market Reaction and Brokerage Outlook

• Shares rose ~5% post‑provisional update, with momentum extending into January on PSU bank rotation; full results January 19 eyed for profit guidance, NPA trends and FY26 targets.​

• Brokerages forecast stronger Q3 profits across PSU banks post‑H1 weakness, citing credit growth, NIM bottoming and clean books; Central Bank’s metrics support 10–12% FY26 business CAGR.​

Key Risks and Watchpoints

• Margin Compression: Sustained CASA weakness or sticky deposit rates could cap NII growth despite advances; Q3 NIM critical.​

• Asset Quality: Unsecured retail/MSME surge risks fresh slippages; PCR buffers mitigate but recovery slowdown a concern.​

• Macro Sensitivity: Rural slowdown or capex delays could moderate Q4 momentum.​

Central Bank of India’s Q3 provisional underscores a lender prioritising scale and market share, with 19.6% loan growth as the standout amid healthy deposit accretion—setting up potential re‑rating if January results confirm profitability resilience.