Public sector lender Canara Bank on Wednesday reported a 9% year-on-year (y-o-y) decline in net profit to Rs 696 crore in the December quarter of FY21, with a 61% rise in provisions to Rs 4,686 crore taking a toll on the bottom line. The bank reported a total revenue of Rs 21,479 crore, up 5.71% YoY.
Net interest revenue (NII) – the distinction amongst interest earned and that expended – stood at Rs 6,081 crore, up 14.6% YoY. Provisions for the quarter stood at Rs 4,686 crore. Its operating profit rose 46.65% YoY to Rs 5,382 crore. The net interest margin (NIM), a essential measure of profitability, fell two basis points (bps) sequentially to 2.8%.Gross non-performing assets (NPAs), as a percentage of total advances, fell 77 bps on a sequential basis to 7.46% and the net NPA ratio declined 78 bps to 2.64%. Slippages throughout the quarter had been to the tune of Rs 395 crore, down from Rs 7,916 crore a year ago, offered the effect of the Supreme Court’s remain on recognising poor loans soon after August 31.
The bank’s management stated after the remain was lifted, there could be slippages worth about Rs 10,000 crore on a loan book of about Rs 6.74 lakh crore. The gross NPA ratio will enhance by about 150 bps and net NPA ratio may well enhance by 130 bps. “So the impact will not be huge because even after adding this as on date, we can maintain a net NPA ratio of less than 4% and a gross NPA ratio of less than 9% with a provision coverage ratio of about 80%. So, for Canara Bank, as far as the slippages are concerned, which are going to be in future, are very well under control,” stated MD & CEO LV Prabhakar.
He added that the ratio of accounts which availed of the one-time restructuring scheme stood at 20 (retail): 80 (corporates) in worth terms. In the retail book, the gross NPA ratio is effectively beneath 2% and in housing loans, it was below 1%. In individual loans and automobile loans, also, poor loans had been below 2%. Gross advances of the bank stood at Rs 6.67 lakh crore as on December 31, 2020, with 5.8% y-o-y development. Total deposits of the bank stood at Rs 9.73 lakh crore as on the very same date, up 7.8% y-o-y. The domestic present account savings account (CASA) share enhanced to 33.41% from 31.8% a year ago.
Canara Bank’s shares on the BSE closed at Rs 131.15 on Wednesday, down 1.83% from their preceding close.