Canara Bank Q3 profit falls 61 pct to Rs 126 cr

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Bengaluru | Updated: Jan 25, 2018 4:59 AM

Canara Bank's net profit fell by 61% to Rs 126 crore for the December quarter of FY18, on the back of higher provisions for NPA and mark to market loss that the bank incurred due to surge in yields.

canara bank, canara bank business, canara bank profit, canara bank net profit, canara bank profit falls, market lossCanara Bank’s net profit fell by 61% to Rs 126 crore for the December quarter of FY18, on the back of higher provisions for NPA and mark to market loss that the bank incurred due to surge in yields. (Image: PTI)

Canara Bank’s net profit fell by 61% to Rs 126 crore for the December quarter of FY18, on the back of higher provisions for NPA and mark to market loss that the bank incurred due to surge in yields. The bank’s net profit was Rs 322 crore a year ago. The provisions and contingencies increased by 80% to Rs 2,673.6 crore for the December quarter, compared to Rs 1,484.5 crore provided during the corresponding quarter of last fiscal. Speaking to FE, Rakesh Sharma, MD and CEO, said, “Despite the huge increase in mark to market provision, we have incurred profit.”. He added, “Our net interest income growth of 52.4% and 11.29% growth in non-interest income-excluding trading profits have significantly shielded us from the quarter-end surge in bond yields and resultant mark to market provisions.” Last month, yields on sovereign bonds rose sharply after the Centre announced additional borrowing of Rs 50,000 crore for the current financial year. Banks normally set aside capital as provision for losses incurred due to fall in bond prices on the back of higher yields.

Despite the fall in net profit, Canara Bank’s net revenues increased by 24.7% year-on-year to Rs 5,245 crore. Another silver lining for the bank was the its CASA (Current Account and Saving Account) deposits that surged by 2.53% year on year to Rs 1.58 lakh crore despite the base effect of last fiscal demonetisation. Rakesh Sharma, said, “Our effort for activation of bank branches and alternate digital channels to generate CASA deposits through better customer value creation have resulted in improvement in CASA ratio to 33.8% overcoming the demonetisation related base effect”. Gross bad loans as a percentage of total loans stood at 10.38% at the end of December, compared with 10.51% in the previous quarter, and 9.97% a year ago.

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