Canara Bank Q2 net profit down 27%

Public sector lender Canara Banktoday reported a 27.1 per cent decline in net profit to Rs 260.18 crore in the second quarter of current fiscal, due to higher provisions. 

The bank had reported a net profit of Rs 356.91 crore during the corresponding period last year. 

Total income of the city headquartered bank during July-September quarter stood at Rs 11,994.64 crore, down from Rs 12,187.12 crore in the same quarter a year ago. 

"Net profit is the outcome of various provisions... whatever provisions we are applying that is just keeping away from the profit. It is for basically strengthening our provision coverage ratio, from 51 per cent last year it has increased to 54.75 per cent now," Canara Bank MD and CEO Rakesh Sharma told reporters here. 

He said"...actually our operating profit has increased, however the reduction is there (in net profit) mainly because of higher provisioning, our target is to increase our provision coverage ratio to 60 per cent in the mid term." 

The bank's Gross Non-Performing Assets (GNPA), as a percentage of advances, increased to 10.51 per cent from 9.81 per cent on annual basis, and the net NPA too rose to 7.02 per cent from 6.69 per cent. 

The provisioning against NPAs rose from Rs 1,558.37 crore in September quarter 2016-17 to Rs 1,949.81 crore in the quarter under review. 

Commenting on the fresh slippages during the quarter, Sharma said, "we have been able to control the slippages. If you look at last quarter our slippages was at Rs 5,511 but now it has declined to Rs 3,367 crore." 

He said that the recovery in return of accounts has improved and the the capital adequacy ratio improved to 12.45 per cent, up from 12.19 per cent a year ago. 

The CASA deposits were up by 17.72 per cent y-o-y, increased to Rs 1.55 lakh crore. It said Domestic CASA share improved to 33.83 per cent from 29.11 per cent last year. 

On the goal for March 2018, the bank officials said it will be continued thrust on retail businesses and asset quality- CASA and retail deposits, retail credit, fee income, containing NPA, resolution to large NPA accounts, recovery and up-gradation, and improving operational financial ratios such as NIM (Net Interest Margin), RoA (Return on assets), RoE (Return on Equity) and cost to income. 

While NIM (domestic) during the quarter stood at 2.60 per cent, NIM (global) was at 2.34 per cent. Branch network of Canara Bank has crossed the 6000 milestone to reach 6119 during the quarter and number of ATMs is at 10339. E-transactions ratio improved to 73.40 per cent from 59.30 per cent a year ago.