Central Bank of India's Certificate of Deposits Rating Reaffirmed at CARE A1+ by CARE Ratings
CARE Ratings reaffirmed Central Bank of India's (CBI) Certificate of Deposits rating at CARE A1+ for a proposed ₹10,000 crore issuance. The rating reflects GoI support, improved capitalisation from ₹1,500 crore QIP in FY25, and strong operational franchise. Asset quality and profitability are moderate but improving, with GNPA at 3.01% as of Sep 30, 2025.
The reaffirmation of the A1+ rating for a significant amount (₹10,000 crore) of Certificates of Deposit is positive for the bank's ability to raise funds efficiently. However, the impact is considered medium as it confirms existing ratings rather than an upgrade and is a routine credit assessment for such instruments, not directly impacting core operations or profitability in a transformative way.
The reaffirmation of a high credit rating (A1+) by CARE Ratings for Central Bank of India's Certificate of Deposits program indicates a stable and positive outlook on the bank's financial health and its ability to meet short-term obligations. Positive factors like government support and improved capitalisation underpin this sentiment.
Central Bank of India (CBI) has announced that CARE Ratings Ltd. has reaffirmed its rating for the bank's Certificate of Deposits (CD) program at CARE A1+. The rating applies to a proposed issuance of CDs amounting to ₹10,000 crore. The rating was reaffirmed on December 12, 2025.
The reaffirmation is attributed to improvements in CBI's capitalisation levels, driven by equity infusion from the Government of India (GoI) and strengthening internal accruals. Notably, the bank raised ₹1,500 crore in FY25 through a Qualified Institutional Placement (QIP), which reduced GoI's shareholding to 89.27% from 93.08%. The rating also factors in continued support from the GoI in terms of funding, management, and governance, with GoI having infused ₹21,835 crore between FY16 and FY23.
CARE Ratings highlights CBI's long operational track record, established pan-India business franchise, diversified advances book focusing on non-corporate clients, and a stable deposit base with a significant proportion of Current Account and Savings Account (CASA) deposits. However, the rating takes into account the bank's moderate, though improving, asset quality and profitability. CARE Ratings anticipates some pressure on the bank's Net Interest Margin (NIM) in FY26 due to faster repricing of advances than deposits post rate cuts, necessitating control over operational and credit costs to maintain profitability.
The bank's asset quality has shown improvement, with Gross NPA (GNPA) ratio at 3.01% and Net NPA (NNPA) ratio at 0.48% as of September 30, 2025. Capital adequacy ratios remain comfortably above regulatory requirements, with CAR at 17.34% as of September 30, 2025. The bank's net advances grew by approximately 16% in FY25, with a focus on retail, agriculture, and MSME (RAM) segments, which constituted 71.54% of total advances as of September 30, 2025.
Profitability saw an increase, with Profit After Tax (PAT) at ₹3,785 crore in FY25, up from ₹2,549 crore in FY24. Return on Total Assets (ROTA) improved to 0.83% in FY25 from 0.61% in FY24. For H1FY26, PAT was ₹2,382 crore with an annualized ROTA of 0.97%. The bank's liquidity position is strong, with a Liquidity Coverage Ratio (LCR) of 241.96% and Net Stable Funding Ratio (NSFR) of 150.47% as of September 30, 2025.
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