The Hindu Business Line : Canara Bank Q3 net down 27%

CANARA Bank reported a net profit of Rs 273.93 crore for the third quarter of this financial year, 26.91 per cent down from the corresponding quarter of the previous year.

Briefing reporters, Mr V.P. Shetty, Chairman and Managing Director of Canara Bank said the bank took a knock of Rs 70 crore in depreciation of securities.

To mitigate the impact of further depreciation, Canara Bank transferred about Rs 6,000 crore of securities from the available-for-sale category to the held-to-maturity (HTM) category. This was permitted by the RBI as a one-time measure, whereby banks were permitted to transfer the securities to HTM, subject to an upper limit of 25 per cent of the demand and time liabilities. Most of the securities transferred to this category were low coupons.

However, despite the transfer, he said, the bank's average yield on investments was consistent at 8 per cent. This was partly because the bank still had some high coupon securities in its books.

The drop in net profits was also partly due to the decrease in treasury incomes. Treasury income in Q3 was only Rs 117.87 crore, against Rs 233.43 crore during the corresponding period of the previous year. However, the bank reported a 10 per cent increase in interest earnings.

Interest earnings in Q3 was Rs 1076 crore (Rs 942.18 crore). Interest on investments, however, fell from Rs 774.30 crore to Rs 749.58 crore during the period.

The bank, Mr Shetty said, was well on its way to achieve the business target of Rs 1,55,000 crore for the current fiscal. The bank had already achieved a little more than Rs 1,51,000 crore till January 21.

For Q3, the bank had reported a business of Rs 1,47,182 crore - 22.24 per cent up from the corresponding period of the previous year.

Advances were Rs 5,35,444 crore during the period and deposits Rs 9,36,638 crore.

Total expenditure for Q3 was Rs 1,620 crore, up 4 per cent from the corresponding quarter of the previous year. The rise was largely due to interest expenditure and deposit, where rates have been hiked during the last few months.

Interest expenditure in Q3 was Rs 1,068 crore (Rs 1,003 crore).

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