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Central Bank India: Dividend Surge Explained
28 Sep
Summary
- Central Bank of India resumed dividend payments in FY25.
- The bank's net profit grew at a 46% CAGR over five years.
- Net NPAs are below 0.5%, supporting dividend sustainability.
Central Bank of India, the nation's first commercial bank established in 1911 and managed by Indians, has recommenced dividend distributions in FY25. This marks a significant return to shareholder payouts after a nearly ten-year hiatus. The bank reported a notable net profit growth of 46% CAGR over the last five years, demonstrating strong financial recovery and operational efficiency.
Key to sustaining these dividends is the bank's robust asset quality, with net non-performing assets (NPAs) reported below 0.5%. Furthermore, its Capital to Risk-Weighted Assets Ratio (CRAR) stood at a healthy 17.91% as of FY26, well above regulatory requirements. These strong financial indicators provide the necessary cushion for continued dividend payouts.
Despite a dividend of ₹1.2 per share in FY26, yielding 3.8%, the bank's valuation remains attractive at 0.69x book value. Future payouts will depend on sustained profitability, stringent asset quality management, and maintaining capital adequacy buffers, alongside adherence to regulatory dividend policies for public sector banks.
