Canara Bank Q1 net rises 72% on retail loan growth

Net profit increased to ₹2,022 crore in the quarter ended June 2022 from ₹1,177 crore a year ago.

Total advances increased by 14% led by a 26% rise in gold loans. Retail, agriculture and loans to micro and small enterprises increased by 15%. Corporate loans also grew 14% year-on-year on the back of demand from sectors like infrastructure, steel, cement and energy.

CEO LV Prabhakar said that the bank is confident of achieving double-digit loan growth even in the current fiscal as both corporate as well retail loans are growing.

Profit increased despite the bank setting aside more money for provisions this quarter. Total provisions including those for NPAs increased 7% to ₹3,690 crore from ₹3,459 crore a year earlier.

Prabhakar said the bank has increased its provision coverage ratio (PCR) to 84% this year from 70% in March 2020 as a prudent measure and expects to keep PCR at 85% at the end of the fiscal.

Canara’s net NPAs reduced to 2.48% from 3.46% a year ago. Recoveries including those from written-off accounts at the end of June 2022 stood at ₹2,597 crore.

Prabhakar said the bank expects to maintain credit costs at 1.40% or below of its total loans.

Other income including fees and trading income increased by 25% to ₹5,175 crore from ₹4,156 crore.

Canara plans to raise ₹5,500 crore through tier-1 bonds this fiscal.