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Canara Bank reported a 190 per cent jump in first quarter net profit at ₹1,177 crore on the back of a robust non-interest income and decline in loan loss provisions.
The Bengaluru-headquartered public sector bank had reported a net profit of ₹406 crore in the year ago period.
Net interest income (the difference between interest earned and interest expended) was a tad higher at ₹6,147 crore ( ₹6,096 crore in the year ago quarter) as the decline in interest expenses was much more than the reduction in interest earned.
Non-interest income, comprising fee-based income, trading income and recovery in written-off accounts rose 67 per cent year-on-year (y-o-y) to ₹4,438 crore ( ₹2,650 crore).
Fee-based income was boosted due to the sale of 1,20 lakh units under Priority Sector Lending Certificates (PSLCs), and earned the bank a commission income of ₹699 crore. Recovery in written-off accounts soared 132 per cent y-o-y to ₹600 crore ( ₹259 crore).
Fresh slippages in the reporting quarter were higher at ₹4,253 crore against ₹1,422 crore in the year ago quarter. However, slippages were lower vis-a-vis January-March 2021 quarter at ₹14,495 crore.
Net interest margin (net interest income/ average interest earning assets) was lower at 2.71 per cent as at June-end 2021 against 2.84 per cent as at June-end 2020.
Gross non-performing assets (GNPA) position improved to 8.50 per cent of gross advances against 8.84 per cent. Net NPA level also improved to 3.46 per cent of net advances against 3.95 per cent.
As at June-end 2021, global deposits increased by about 12 per cent y-o-y to ₹10,21,837 crore. Global advances were up 5 per cent y-o-y to ₹6,84,585 crore, with domestic advances growing but overseas advances shrinking.
For FY22, the bank has given a guidance of 8.20 per cent growth in global deposits and 7.50 per cent growth in global advances. It has guided for a GNPA (global) of 7.90 per cent, net NPA (global) of 2.80 per cent and NIM of 2.75 per cent.
The bank expects to raise ₹9,000 crore via qualified institutions placement ( ₹2,500 crore), Additional Tier-I Bonds ( ₹4,000 crore) and Tier-II Bonds ( ₹2,500 crore).
Canara Bank’s shares closed at ₹148.80 apiece, up 1.47 per cent over the previous close on BSE.
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