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Higher provisioning for NPAs and depreciation on investments dragged Canara Bank’s profit for the third quarter down 42.38 per cent.
The bank’s posted a profit of ₹409.35 crore in the third quarter of this financial year against ₹710.51 crore in the same period last year.
Total income increased 16.45 per cent to ₹10,935.29 crore from ₹9,390.29 crore last year. The bank’s earnings per share (basic) stood at ₹9.24 (₹16.04 last fiscal).
“Third-quarter profits were hit due to higher provisioning of ₹1,182 crore. The bank performed well in retail lending, MSE, housing and vehicle loans,” said RK Dubey, Chairman and Managing Director of Canara Bank.
“The bank made a record cash recovery during the quarter, at ₹3,135 crore, compared with ₹2,477 crore last year,” he added.
Operating profit grew 5 per cent to ₹1,591 crore. Net Interest Income (NII) for the quarter increased 12 per cent to ₹2,227 crore from last year. The net interest margin was flat at 2.21 per cent. The margin was 2.22 per cent in the corresponding quarter of the previous year.
Gross non-performing assets (NPA) stood at ₹8,073.92 crore (₹6,090.08 crore). The gross NPA ratio was 2.79 per cent compared with 2.77 last year. Net NPAs were at ₹6,869.87 crore (₹5,134.40 crore). The net NPA ratio stood at 2.39 per cent as against 2.35 per cent last year. Global deposits touched ₹4,08,924 crore at the end of Q3, with 26.2 per cent year-on-year growth compared with ₹3,23,963 crore last year.
Global advances recorded 31.8 per cent growth to reach a level of ₹2,87,700 crore as compared with ₹2,18,242 crore last year. As per the new Basel III norms, the Capital Adequacy Ratio was at 9.83 per cent and tier-I ratio was 7.48 per cent, as of December 2013.
To improve capital adequacy norms, the bank is planning to raise ₹1,000 crore subordinate unsecured debt by March 2014.
According to Ashok Kumar Gupta, Executive Director: “Early this year, we got ₹500 crore capital infusion from the Government. Now, we are in the process of finalising ₹1,500 crore tier-II capital bonds.” “To further strengthen our CAR, we are exploring raising ₹1,000 crore. EPFO and LIC have shown interest and we are in talks with them,” he added.
The bank is also likely to get a ₹500 crore incentive for pushing consumer and auto loans. It has so far lent ₹5,000 crore in the last three months.
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