Canara Bank reported a 16 per cent drop in net profit at ₹528.86 crore for the quarter ended September 2015 on higher provisioning. The Bengaluru-headquartered public sector bank had reported a net of ₹626.84 crore in the same quarter last year.

Net interest income, the difference between interest earned and expended, grew 11.7 per cent to ₹2,646 crore (₹2,367 crore in the year-ago quarter). Operating profit rose 19 per cent to ₹1,944.10 crore (₹1,625.54 crore).

The bank made a 49 per cent increase in provisioning at ₹1,212.31 crore (₹813.70 crore). Gross net performing assets (NPAs) for the quarter rose 54 per cent to ₹14,021.34 crore (₹9,164.26 crore). Net NPAs were up 31 per cent at ₹9,382.53 crore (₹7,170.30 crore). Gross NPAs as percentage of advances stood at 4.27 per cent, while net NPAs were higher at 2.90 per cent.

Fresh slippages stood at around ₹2,000 crore during the quarter. “We have been able to control fresh slippages and have strengthened the provision coverage ratio (PCR) to 59.8 per cent,” said Rakesh Sharma, MD and CEO, Canara Bank. The bank has strengthened the recovery process and aims to bring down the GNPAs to less than 4 per cent by March 2016, Sharma added.

Tracking the results, Canara Bank shares ended 1.84 per cent lower, at ₹274.30, on the BSE on Wednesday.

Credit offtake to rise Sharma expects credit offtake to pick up in the remaining half of the current fiscal. “Credit growth stood at 4 per cent in the first half and we expect overall growth to be 12-13 per cent for the year,” he added.

Further, to shore up its capital base, Canara Bank proposes to raise Tier II capital during the current quarter. “We will seek board approval for raising Tier II capital,” he said, adding that the quantum is yet to be decided. The government infused ₹947 crore in fresh capital during the September quarter.

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