CRISIL Ratings has upgraded the long-term ratings for Central Bank of India’s corporate credit rating and its Tier II and Tier I bonds to ‘Crisil AA+/Crisil AA/Stable’ from ‘Crisil AA/Crisil AA-/Stable’. The bank’s certificate of deposits programme rating has been reaffirmed at ‘Crisil A1+’. The upgrade reflects sustained improvements in the bank’s earnings profile and asset quality.
Central Bank of India’s Ratings Enhanced
CRISIL Ratings has announced an upgrade in the long-term ratings for Central Bank of India. The corporate credit rating, along with its Tier II and Tier I bonds (under Basel III), has been elevated to ‘Crisil AA+/Crisil AA/Stable’. This signifies an improvement from the previous ratings of ‘Crisil AA/Crisil AA-/Stable’. Additionally, the bank’s certificate of deposits programme has had its rating reaffirmed at ‘Crisil A1+’.
Key Factors Driving the Upgrade
The rating action by CRISIL is primarily driven by the sustained improvements observed in Central Bank of India’s earnings profile and asset quality. These positive trends are expected to continue over the medium term. The bank has demonstrated profitability since fiscal 2022, supported by lower credit costs, improved net interest margins (NIMs), and other income streams. A robust provision coverage ratio (PCR) of 81.4% as of June 30, 2026, indicates enhanced resilience against non-performing assets (NPAs). Gross NPAs have stabilized at 2.6% as of June 30, 2026.
Strong Capital Position and Government Support
Central Bank of India’s capital position remains adequate, bolstered by consistent internal accruals and timely equity infusions from the majority stakeholder, the Government of India (Gol). The bank’s Tier 1 capital adequacy ratio stood at 16.5% and the overall CAR at 18.3% as of June 30, 2026. CRISIL emphasizes the expectation of strong ongoing support from the Gol, which is crucial for the stability of the Indian financial sector.
Improved Operational Performance
The bank’s operational performance has seen consistent improvement, with twenty-one consecutive quarters of reported profits. Return on Assets (RoA) improved to 1.0% (annualised) in the first quarter of fiscal 2027. The bank’s resource profile is adequate, with a significant proportion of low-cost CASA deposits accounting for 46.6% of total deposits as of June 30, 2026. Gross advances grew by a notable 29% y-o-y to Rs 3,54,348 crore as of June 30, 2026.
Outlook Remains Stable
CRISIL Ratings maintains a ‘Stable’ outlook on Central Bank of India. The agency believes the bank will continue to benefit from government support and its ability to further improve its earnings profile and asset quality will be a key monitorable going forward.
Source: BSE
