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Central Bank FY06 profit drops

 Mumbai-based, non-listed Central Bank of India has posted a 28% dip in net profit from Rs. 357.41 crore to Rs. 257.42 crore in the financial year 2005-06, as compared to the previous fiscal, mainly on account of depreciation on investments and eroding treasury income.

Income on investments fell from Rs. 2674 crore to Rs. 2561 crore in the reporting period - thus registering de-growth of Rs. 113 crore or 4%. Operating profit declined from Rs. 1609 crore to Rs. 1195 crore – a steep decline of about 35%. Total expenditure also went up for the bank by 5%, on account of increase in establishment expenses.

The capital-adequacy ratio of the bank dipped to 11.03% as of March 31, 2006 as compared to 12.15% - a year ago.

The bank, which plan to come out with an initial public offering in this fiscal, is waiting for the change in the Companies Act, 1956 and in the Banking Regulation Act, 1949, which would enable it to hit the capital market informed H.A. Daruwalla, chairperson and managing director of the bank. “The equity capital of the bank is Rs. 1124 crore and we wish to treat it partly by equity and partly preference share”, Ms. Daruwalla informed.

The bank would be requiring Rs. 800 crore in the current fiscal to support its growth plans. According to sources, the bank may plan for an IPO amounting not less than Rs. 500 crore.



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