Comments
After a five years hiatus, Canara Bank declared a dividend, following a good set of numbers in its latest quarter. L V Prabhakar who took over as the MD and CEO of the bank in February 2020 says, this year the bank is targeting a balance sheet in excess of ₹20 lakh crore with a healthy and profitable double-digit growth in its lending portfolio, even as he says Canara is poised for sustainable growth. The bank is also launching a super app in a month’s time. Edited excerpts:
After a 5-year break, the bank announced dividend for the first time. What has helped the bank to improve performance?
When I took over in February 2020, in the immediate June quarter we announced a net profit of ₹406 crore. In the just concluded March quarter, the bank declared ₹1,666 crore in net profit indicating more than 300 per cent growth. The net NPA (non-performing assets) have declined to 2.65 per cent in the just concluded quarter from 3.95 per cent in the June 2020 quarter. Our return on assets has grown by 41 basis points in the same period.
In the last quarter, the credit growth was 9.77 per cent though we had guided for 7.5 per cent. We have under promised and overdelivered consistently over the last couple of years. In RAM (Retail, Agriculture, MSME) space, we have done very well. In corporate and housing loans, too, we are showing good growth.
We are doing co-lending with a couple of partners and may increase our partnership to an additional two players as we intend to co-lend about ₹9,000 crore this year. We are also aiming at loan recoveries of ₹15,000 crore.
With cost of funds rising, how do you intend to ensure growing your lending portfolio while maintaining profitability.
Our CASA (current account, savings account) growth is at 11.5 per cent and (other) savings growth at 12.2 per cent have been very healthy. Our cost of deposits is 3.95 per cent, overall cost of funds is 3.6 per cent. Against that, my yield on advances is 7.22 per cent and NIM (net interest margin) is 2.82 per cent, which this year we will take it up to 2.90 per cent. Because of efficient handling of bulk, retail term deposits and continuous growth of CASA, we have managed our funds well. This year, we will raise ₹9,000 crore by issuing additional tier 1 & 2 bonds, but have no plans for equity dilution.
After amalgamation (of Syndicate Bank into Canara), what has been the technology roadmap?
We have successfully dealt with HR, technology and process issues post-amalgamation. Infact, the number of opportunities for our staff has increased after (amalgamation) which is reflected in performance. We are one of the few large banks to have given a 15-day performance-linked incentives to our employees.
On technology, we ihave dentified a ₹1,000 crore investment roadmap, and have partnered with the likes of Oracle and IBM to ensure greater convenience to the customers. We have spent ₹800 crore and an additional ₹200 crore would be spent on mobile, internet banking and related areas.
While we have a good app currently, we will in the next month or so, launching a super app providing over 250 plus features for the greater convenience of our customers. Already, 8,000 people are testing the app, including employees, customers. We will launch within a month.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.