Canara Bank has reported a loss of ₹4,860 crore in the fourth quarter of 2017-18 against the ₹214 crore profit it posted in the same period last year.
The bank’s total income came in lower by 10.34 per cent at ₹11,555 crore against the ₹12,889 crore recorded last year.
The bank said it has not opted for the RBI dispensation for staggering the NPA provisioning. It has front-loaded the NPA recognition, and the consequent higher provisioning has consumed its operating profit.
The provisioning on account of NPAs increased to ₹13,770 crore during 2017-18 from ₹7,792 crore inthe previous year. Consequently, the bank posted a net loss of ₹4,222 crore for the financial year 2017-18.
Rakesh Sharma, Managing Director and CEO, Canara Bank, stated that with stress almost recognised fully, the bank is poised for a stable and profitable growth during the current year.
To actualise this, the bank is working on reorienting and strengthening the balance sheet by augmenting retail business, digitalisation and transformation.
The bank has surged ahead in consolidating its position among commercial banks with a robust business growth of 8.3 per cent. Its C-D ratio improved to 72.7 per cent from 69.1 per cent.
The improvement in the share of retail loans in total advances has derisked the balance sheet. Further, the bank has calibrated its growth in the corporate sector by limiting its exposure to sectors under stress. Net interest income (NII) of the bank surged by 10.33 per cent to ₹2,988 crore y-o-y from ₹2,708 crore. Net interest margin (NIM) (domestic) improved to 2.65 per cent and NIM (global) stood at 2.42 per cent.
Asset quality
The bank’s gross NPA stood at ₹47,468 crore (₹34,202 crore last year), net NPA for Q4 is ₹28,542 crore (₹21,649 crore last year) and the percentage of gross NPA stood at 11.84 per cent against 9.63 per cent last year.
The percentage of net NPA stood at 7.48 per cent against last year’s 6.33 per cent.
Domestic CASA share improved to 34.28 per cent from 32.85 per cent a year ago. CASA deposits were up by 11.54 per cent y-o-y at ₹1.67 lakh crore. Capital adequacy ratio (CAR) of the bank improved to 13.22 per cent, up from 12.86 per cent a year ago. Provision coverage ratio (PCR) also improved to 58.06 per cent from 55.62 per cent last year.
The bank’s global business rose to ₹9.06 lakh crore, up by 8.26 per cent y-o-y.