State-owned Canara Bank reported an 89.5% year-on-year jump in the September quarter net profit to Rs 2,526 crore, backed by a sharp rise in earnings from retail lending.
The net profit was Rs 1,333 crore in the year-ago period.
The bank’s net interest margin (NIM), a key profitability metric, improved to 2.86% for the quarter under review against 2.77% in the same period last year.
Managing director LV Prabhakar said the bank is aiming for an NIM rise to 2.9% by the end of the year.
Its operating profit rose 23% to Rs 6,905 crore, supported by an 18.5% rise in net interest income – the difference between interest earned and interest spent – at Rs 7,434 crore.
Other income also rose 13% to Rs 4,825 crore despite a fall in treasury earnings.
The segment results showed that earnings from retail banking operations during the quarter jumped to Rs 2,591 crore from Rs 926 crore in the year-ago period. Earnings from treasury was lower at Rs 1,408 crore (Rs 1,931 crore) while it continued to suffer losses in the wholesale operations.
There was a modest 2.5% rise in loan loss provisions at Rs 2,745 crore over what it was a year ago, although the bank witnessed improvement in asset quality. Its gross non-performing assets ratio fell to 6.37% at the end of September, down from 8.42% a year ago. Net NPA ratio reduced to 2.19% against 3.21%.
The bank’s advances rose 20% year on year to Rs 8.24 lakh crore, supported by both retail and corporate credit demands.The bank saw its retail loans growing at 16.4% while corporate credit grew at 24%.
Responding to a query from ET, Prabhakar said he expects continuation of good credit demand in the near future backed by industrial demand.
“Going forward, corporate credit may not grow at the same rate, but demand from retail, agriculture and MSME sectors will continue,” the MD said. The bank’s deposits rose nearly 10% to Rs 11.34 lakh crore by the end of the reporting period from what it was a year back.
Prabhakar said the bank will be raising another Rs 3,000 crore through Additional Tier-1 bonds and Tier-2 bonds by the end of the fiscal year. It already raised Rs 4,000 crore in AT-1 bonds and Rs 2,000 crore in Tier-2 bonds.
Its capital adequacy ratio stood at 16.5% at the end of September.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
