The Hindu Business Line : Canara Bank Q1 net up 32%

CANARA Bank has registered a 32-per cent net profit growth in the first quarter this financial year at Rs 336.44 crore, up from Rs 255.85 crore posted in the corresponding period of the previous year.

However, this was lower than the sequential quarter ended March 31, 2004, when the profits were Rs 384.12 crore. The reason for the slowdown was partly due to seasonal factors.

Speaking to reporters here, Mr R.V. Shastri, Chairman and Managing Director of Canara Bank, said the profits were driven by rising credit off-take and falling deposit rates. The cost of deposits averaged 4.71 per cent in Q1.

Total income in Q1 was Rs 2,185 crore, up from Rs 2,063.22 crore during the corresponding quarter of the last financial year. Interest earnings were Rs 1,819 crore (Rs 1,744 crore). Investment income also increased to Rs 776.99 crore (Rs 749.22 crore) despite a fall in yields.

However, Mr Shastri admitted that a slowdown had taken place in treasury profits, unlike in the previous years. This quarter treasury profits were Rs 173 crore (Rs 143.32 crore).

The bank also made lower provisions this year of Rs 127 crore (Rs 148 crore) on non-performing assets. This was on account of the Rs 800 crore of floating provisions already being maintained. As a result, the operating profits went up to Rs 644.64 crore (Rs 497.10 crore).

The bank, Mr Shastri said, planned to reach a business level of Rs 1,55,000 crore by March 2005 of which at least Rs 56,000 crore was expected to come from advances. Agriculture and retail credits were expected to power this growth in credit, he said.

It also planned to reach one million debit cards by the end of the current financial year from 7.5 lakh presently. Most ATM cardholders, he said, were already being converted into debit cards. He also said that the bank hoped to reach one million credit card customers by the end of next year. It also planned to introduce core banking solution in 1,000 branches over two years, he added.

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