The Hindu Business Line : Canara Bank Q3 net hit by investment loss

Taking stock: Mr M. B. N. Rao (right), CMD, Canara Bank, and Mr Alok K. Misra, Executive Director, at a press conference in Bangalore on Thursday. - G.R.N. Somashekar

Bangalore , Jan. 18

Public sector Canara Bank reported a 1.88 per cent increase in net profits for the third quarter of the financial year.

The profits would have been higher but for the depreciation on investments. Briefing reporters on the Q3 results, Canara Bank's Chairman and Managing Director, Mr M.B.N. Rao, said: "Our depreciation on investments increased last quarter."

During the period bank's depreciation on investments rose to Rs 284 crore (Rs 175 crore). This was largely on account of the rise in yields of government securities.

Key Figures

As a result, the net profit for Q3 was Rs 363.02 crore (Rs 356.29 crore) .

Gross profit was Rs 701.01 crore (Rs 699.18 crore). The bank's gross revenue was higher at Rs 3,260.66 crore (Rs 2,551.22 crore).

Interest income was higher at Rs 2,961.36 crore (Rs 2,240.07 crore).

Interest income during the period was Rs 2,961.36 crore (Rs 2,240.07 crore).

The rise in interest income was contributed by the 29 per cent increase in credit.

The outstanding advances till December end was Rs 90,723 crore. The bank's gross expenditure was up at Rs 2,559.65 crore (Rs 1,852.04 crore).

This increased expenditure was largely on account of a steep rise in interest expenditure.

Interest expenditure rose to Rs 1,922.78 crore (Rs 1,281.83 crore). The increased expenditure was contributed by the bank's aggressive deposit mobilisation efforts during the period.

As a result, outstanding deposits rose 26 per cent to Rs 13,1781 crore.

During this period Canara Bank had also tweaked term deposit rates, raising it for some maturities. The bank, however, managed to contain the operating costs for the period to Rs 636.87 crore in Q3.

Mr Rao said that the bank managed to bring down its gross NPA ratios down to 2.06 per cent (3.06 per cent). In absolute terms also the Gross NPA came down to Rs 1,874 crore (Rs 2,204).

NPA recoveries so far were Rs 653 crore, well ahead of the target fixed for the year. The bank transferred Rs 120 crore of the recoveries to the profit and loss account, which in turn helped boost its profits.

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