Canara Bank Q2 Results: Profit jumps 43% YoY to Rs 3,606 crore on lower provisions
Canara Bank Thursday reported a 43% rise in net profit at Rs 3,606 crore for the September quarter, buoyed by lower provisions and rise in net interest income (NII). The stock bucked the broader market’s declining trend.
The net profit for the year-ago period was at Rs 2,525 crore.
Net interest margin (NIM), a key gauge for profitability, was at 3.02% at the end of September, a 19-basis-point improvement year-on-year.
One basis point is a hundredth of a percentage point.
The bank's NIM may come under pressure in the next two quarters as interest expenses are rising amid tight market liquidity.
«Our guidance for NIM is 3.05%. If liquidity improves, we may be able to maintain NIM above 3%.
Otherwise, it may be less than 3%. But it will not go below 2.90%,» managing director Satyanarayana Raju said.
The bank's operating profit rose 10.3% at Rs 7,616 crore, backed by a near-20% jump in net interest income at 8,903 crore.
Other income was little lower at Rs 4,635 crore, against Rs 4,825 crore, primarily due to lower treasury income.
A 28.3% decrease in total provisions at Rs 2,608 crore boosted the state-owned lender's net profit. Of this, provision to cover bad loans was also lower at Rs 2201 crore against Rs 2745 crore, in sync with asset quality improvement.
Gross non-performing assets ratio improved to 4.76%, down by 161 bps year-on-year.
Net NPA ratio stood 78 bps lower at 1.41%. Provision coverage ratio also improved 337 bps to 88.73% at the end of September.
The bank's gross advances grew 12% year-on-year to Rs 9.24 lakh crore, supported by 13.6% rise in retail agriculture and MSME advances which together constitute 56% of total advance portfolio.
Investors flocked to the Canara Bank counter following the
