Canara Bank Q3 profit sinks 87% to Rs 85 cr, provisions up 70%

Canara Bank disappointed analysts with its third quarter earnings on Friday. Profit plunged 87 percent year-on-year to Rs 85 crore on higher provisions during the quarter. 

Net interest income, the difference between interest earned and interest expended, declined by 6.5 percent to Rs 2,226.6 crore in quarter ended December 2015 compared to Rs 2,380.48 crore in corresponding quarter of last fiscal. Other income (non-interest income) fell 0.6 percent year-on-year to Rs 1,168.6 crore and operating profit slipped 13.6 percent to Rs 1,552.44 crore in Q3.

Provisions for bad loans jumped 17.9 percent sequentially and 69.8 percent year-on-year to Rs 1,428.9 crore in quarter ended December 2015. 

Tax expenses declined 87 percent to Rs 38.6 crore in Q3 compared to Rs 300 crore in same quarter last fiscal. 

Asset quality weakened during the quarter with gross non-performing assets (NPA) rising 157 basis points QoQ and 249 bps YoY to 5.84 percent. 

Net NPA climbed 100 bps QoQ and 148 bps YoY to 3.9 percent in quarter ended December 2015. At 14:47 hours IST, the scrip of Canara Bank was quoting at Rs 171.95, down Rs 0.75, or 0.43 percent on the BSE.