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Heavy provisioning has impacted Canara Bank’s profits. The bank has posted a 5.31 per cent higher profits for second-quarter of FY 2020-21 at ₹466.41 crore as against ₹442.86 crore posted in the same period last year.
The bank’s profits got impacted due to ₹4,021.34 crore provisions (other than tax) and contingencies for Q2, as against last year’s ₹2,109.97 crore. For Q1 of this fiscal, the bank had made a provision of ₹3,826.61 crore.
For Q2, the bank’s total income grew by 46.24 per cent at ₹22,681.05 crore as against ₹15,509.36 crore recorded last year. EPS for the quarter stood at ₹3.21 as against ₹5.88 posted last year.
The bank’s corresponding figures of September 30, 2019 and March 31, 2020 are pre-amalgamation, and hence not comparable.
LV Prabhakar, MD and CEO, Canara Bank, said: “Despite heavy provisioning for regular NPA accounts, this quarter we have made provisioning of ₹1,676 crore for two quarters to a NBFC account, which we have declared as fraud. On the whole, the bank's operating profit grew by 32.53 per cent in Q2. We also saw all-round growth in savings, which grew by 13.38 per cent; CASA grew by 14.47 per cent, retail term deposit was up by 18.14 per cent; and gross NPA reduced to 8.23 per cent.”
Segment revenues
Canara Bank’s treasury operations fetched ₹5,260.05 crore in Q2 (up from ₹3,045.71 crore in the year-ago period), retail banking operations rose to ₹9,587.11 crore (₹6,382.94 crore) and wholesale banking operations fetched ₹5,853.47 crore (₹4,688.95 crore).
Asset quality
The bank’s net-interest income (NII) grew by 29.31 per cent to ₹6,296 crore, while non-interest income increased by 12.04 per cent to ₹3,155 crore. Canara Bank’s gross NPA stood at ₹53,648.29 crore as against last year’s ₹38,934.30 crore, and net NPA at ₹21,097.17 crore ( ₹22,122.38 crore). Return on assets, annualised, is 0.18 per cent as against 0.25 per cent recorded last year.
Deposits/advances
The bank’s global business increased by 6.28 per cent to ₹15,97,747 crore as on September 30, 2020, with global deposits at ₹9,48,767 crore (9.19 per cent) and global advance (gross) at ₹6,48,980 crore (2.28 per cent).
Capital adequacy
The bank’s Provision Coverage Ratio (PCR) improved to 81.48 per cent as at September 2020 from 69.60 per cent last year. The CRAR stood at 12.77 per cent, of which Tier-I constituted 9.54 per cent and Tier-II 3.23 per cent.
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