Canara Bank on Monday reported a 72% year-on-year (Y-o-Y) jump in its net profit to Rs 2,022 crore for the quarter ended June on the back of a 24.5% growth in non-interest income to Rs 5,175 crore.
The bank reported a total income of Rs 23,352 crore, up 11.5% YoY. The operating profit rose 20.5% to Rs 6,606 crore. The net interest margin, a key measure of profitability, fell 15 bps sequentially to 2.78%.
Gross advances of the bank grew 14.5% YoY to Rs 7.84 trillion as on June 30, 2022. Loans to the retail, agri and micro, small and medium enterprises (MSME) segments grew 15%, while corporate lending rose 14%.
LV Prabhakar, MD & CEO, said the bank’s corporate book grew nearly 9% on a sequential basis in Q1. “We see a lot of traction as far as corporates are concerned. In the coming quarters also, apart from RAM (retail, agri and MSME) growth of more than 14%, we are expecting there will be a good growth (on a) Y-o-Y basis even in corporate credit.”
Total deposits of the bank stood at Rs 11.18 trillion as on June 30, 2022, up 9.4% YoY. The domestic current account savings account share stood at 34.3%, against 34.21% a year ago.
Provisions for the quarter stood at Rs 3,690 crore, up 6.7%. Slippages fell to Rs 3,606 crore in Q1FY23 from Rs 3,619 crore in the previous quarter.
Gross non-performing assets (NPAs) as a percentage of total advances fell 53 bps on a sequential basis to 6.98% and the net NPA ratio declined 17 bps to 2.48%. The bank made recoveries worth Rs 2,597 crore during the quarter. Upgrades were to the tune of Rs 756 crore, while loans worth Rs 2,225 crore were written off.
Prabhakar said the bank expects slippages of up to Rs 15,000 crore in FY23, with most of it coming from small-value retail, agri and MSME accounts. “We have guided at the beginning of the year that our recoveries will be more than that (slippages). We’ve said our slippage ratio will be less than 1.75%. So, the slippages that are likely in MSME have all been factored into that 1.75%,” he said.