17 hrs ago
Central Bank of India Revives Dividends Amid Stronger Fundamentals
Central Bank of India stopped paying dividends for almost ten years, but it started paying them again in FY25.
It paid ₹1.20 for each share in FY26.
At the price mentioned in the article, this equals a dividend yield of about 3.8%.
The bank earned more money because its loans and other income grew.
Its profit increased to ₹4,369 crore in FY26.
Fewer of its loans became troubled, and the bank kept substantial money aside to cover possible losses.
It also had a strong capital cushion, which helps protect it from unexpected problems.
However, the bank cannot simply pay out all its profits because it must follow reserve and regulatory rules.
Future dividends will depend on whether profits, capital, and loan quality remain strong.
Central Bank of India resumed dividend payments in FY25 after nearly a decade, raising the payout to ₹1.20 per share in FY26.
The FY26 dividend implies a 3.8% yield at the article’s reference price of ₹31.20.
FY26 net profit rose 15.4% to ₹4,369 crore, while gross advances increased 18.8% to ₹3,44,516 crore.
Net NPA fell to 0.49%, the Provision Coverage Ratio reached 95.97%, and CRAR stood at 17.91% in FY26.
Future dividends remain dependent on profit growth, asset quality, capital adequacy, statutory reserves, and regulatory payout limits.
- Who
- Central Bank of India, its shareholders, and its Board of Directors.
- What
- The bank resumed dividends and increased its FY26 dividend to ₹1.20 per share while reporting stronger profits, lending, asset quality, and capital ratios.
- Where
- India.
- When
- The dividend resumed in FY25 and increased in FY26; the article also discusses Q1FY27 and cites a share price as of September 25.
- Why
- Improved profitability, loan growth, lower net NPAs, strong capital adequacy, and compliance with dividend-related requirements supported the payout, although future payments remain conditional.
Dividend Supporters
Dividend Caution
Profit and cash-generation capacity
Dividend Supporters
Profit rose to ₹4,369 crore in FY26, while lending, non-interest income, and recoveries from written-off accounts increased, providing room for distributions.
Dividend Caution
Dividends can be paid only from current-year profit, and future payouts depend on continued earnings growth rather than the FY26 increase alone.
Asset quality and capital
Dividend Supporters
Net NPA was 0.49%, the Provision Coverage Ratio was 95.97%, and CRAR was 17.91%, indicating substantial buffers above the stated requirements.
Dividend Caution
A deterioration in asset quality or capital adequacy could limit dividends, while the bank must retain capital to support lending, branch expansion, and digital investment.
Valuation and future outlook
Dividend Supporters
The bank traded at 0.69 times book value, below its five-year median and the cited public-sector-bank multiple, and reported Q1FY27 net profit growth of 13.3%.
Dividend Caution
The article says the stock should be viewed as a watchlist candidate rather than a recommendation, and dividend growth remains subject to regulatory ceilings and business performance.
Key facts
- FY26 dividend
- ₹1.20 per share
- Reference share price
- ₹31.20 as of September 25
- Implied dividend yield
- 3.8%
- FY26 net profit
- ₹4,369 crore
- FY26 net NPA
- 0.49%
- FY26 CRAR
- 17.91%
- FY26 payout
- ₹1,086.2 crore, equal to 24.86% of standalone net profit
- Branch network
- 4,606 branches, with 65.2% in rural and semi-urban regions
Sources
Related news
HUDCO's Profit Growth Supports Dividends, But Payout Growth May Lag
Eight PSU Stocks Offer Dividend Yields Above Five Percent
Bandhan Bank Shares In Focus As Ratings Highlight Recovery Risks
Tech Mahindra and Swaraj Engines Offer Contrasting Dividend Stories
NTPC Pays ₹3,394 Crore Final Dividend for FY26
Fifteen Indian Stocks Offer Higher Dividend Yields Than FDs
Generali Central Warns EoM Cuts Could Strain Smaller Insurers
Government Extends Executive Directors’ Tenures at Five PSU Banks
Home Loan Rates Show Lakhs Can Turn on Small Differences
Senior Citizens Compare FD Rates Across Bank of India, SBI
