Bangalore, Oct 24
PUBLIC sector Canara Bank has reported a 23 per cent drop in net profits in the second quarter of this financial year on account of increased provisioning.
Net profits were down to Rs 306.51 crore in the second quarter (Q2) this year from Rs 396.79 crore during the corresponding previous period.
However, on a sequential quarter basis, the net profits actually rose 64 per cent. In Q1 this year, the bank's profits were Rs 186.90 crore.
Speaking to presspersons here today on the results, the bank Chairman and Managing Director, Mr M.B.N. Rao, said the bank showed higher operating profits than both sequentialy and year-on-year.
The bank's gross income rose to Rs 2,494.11 crore, up from the corresponding quarter of last year of Rs 2,206.12 crore.
The bank's gross expenditure also went up during the period to Rs 1,913 crore up from Rs 1,631.28 crore during the period due to increase in wage liabilities and provisions for wage settlements.
Mr Rao said that the bank was adequately capitalised. Canara Bank's capital adequacy ratio is currently 12.35 per cent and would rise further if the Investment Fluctuation Reserve were also included..
Mr Rao said the bank had sufficient cushion for another round of equity raising if the Government permitted them to do so.
In talks with China banks
Canara Bank has held negotiations with a clutch of Chinese banks for sharing its technical resources in farm lending.
The banks included the China Construction Bank, the Agricultural Bank of China, the Bank of China and the China Communications Bank.
The discussions did not include joint venture agreements for new ventures, Mr M.B.N. Rao Chairman and Managing Director of Canara Bank, said.
The discussions, he said, focussed on sharing Canara Bank's appraisal techniques in farm and small-scale enterprises credits. This was an area where China was weak, he said.