Reduction in cost of deposits and improvement in net interest income and non-interest income helped boost Canara Bank’s profit by 9.89 per cent to ₹251.60 crore in the first quarter of 2017-18 from ₹229 crore during the same period last year.

The bank’s total income in Q1 rose 4.39 per cent to ₹12,304 crore (₹11,786.35 crore last year). EPS (basic) stood at ₹4.21 (₹4.22).

Commenting on the bank’s performance, Rakesh Sharma, Managing Director and CEO, said the profit growth has been a consequence of a multi-faceted approach aimed at reducing the cost of deposits (down 62 basis points), improvement in the credit-deposit ratio (to 70.55 per cent from 69 per cent earlier), 33 per cent non-interest income growth and net interest income growth of 17.6 per cent. The quarter also saw the bank make cash recoveries to the tune of ₹1,331 crore.

However, the quarter also saw slippages to the tune of ₹5,500 crore.

Asset quality

In Q1, the bank’s gross non-performing assets (NPAs) stood at ₹37,657.76 crore (last year ₹32,334 crore) with the percentage of gross NPAs at 10.56 per cent (9.71 per cent).

Net NPAs came in at ₹24,300 crore (₹21,494 crore) and in percentage terms at 7.09 per cent (6.69 per cent).

The cost of deposits of the bank fell by a healthy 62 bps to 5.83 per cent from 6.45 per cent last year.

The cost-to-income ratio came down to 48.72 per cent from 52.74 per cent.

The net interest margin (domestic) stood at 2.56 per cent and NIM (global), at 2.34 per cent.

The net interest income (NII) rose 17.59 per cent to ₹2,713 crore, while non-interest income grew 33 per cent to ₹2,109 crore. The share of non-interest income in total income improved to 17.14 per cent.

Current account, savings account (CASA) deposits rose 16.23 per cent year-on-year to ₹1.49 lakh crore.

The capital adequacy ratio of the bank improved to 12.61 per cent, up from 12.11 per cent a year ago.

The provision-coverage ratio stood at 54.52 per cent, up from 50.82 per cent last year.

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