Canara Bank’s Q2 profit falls 28% y-o-y on higher provisions

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October 30, 2020 2:30 AM

Gross advances of the bank stood at Rs 6.49 lakh crore as on September 30, 2020 with growth of 2.28% y-o-y.

The total provisions made against accounts being held as standard under the judicial order stood at Rs 125 crore. The total provisions made against accounts being held as standard under the judicial order stood at Rs 125 crore.

Public-sector lender Canara Bank on Thursday reported a 28% year-on-year (y-o-y) decline in net profit to Rs 444 crore in the September quarter of FY21, with a 45% rise in provisions taking a toll on the bottomline. The bank reported a total income of Rs 20,837 crore, up 1.08% y-o-y.

Net interest income (NII) — the difference between interest earned and interest expended — stood at Rs 6,296 crore, up 29% y-o-y. Provisions for the quarter stood at Rs 4,195 crore. Canara Bank’s operating profit rose 32.5% y-o-y to Rs 4,640 crore. The net interest margin (NIM), a key measure of profitability, fell two basis points (bps) sequentially to 2.82%.

In line with the Supreme Court’s order and necessary guidelines issued by the Reserve Bank of India (RBI), Canara Bank has kept Delhi Airport Metro Express’ Rs 58.55-crore account as a standard account on its books. At the same time, it has made provisions worth Rs 14.64 crore against the account, according to income recognition and asset classification (IRAC) norms. The total provisions made against accounts being held as standard under the judicial order stood at Rs 125 crore.

The bank showed an improvement in terms of asset quality. Gross non-performing assets (NPAs) as a percentage of total advances fell 61 bps on a sequential basis to 8.23% and the net NPA ratio declined 53 bps to 3.42%. In absolute terms, GNPAs stood at Rs 53,438 crore, while net NPAs stood at Rs 21,063 crore at the end of Q2FY21. Slippages during the quarter were to the tune of Rs 327 crore, down from Rs 4,574 crore a year ago, given the impact of the moratorium through two months of the quarter.

Gross advances of the bank stood at Rs 6.49 lakh crore as on September 30, 2020 with growth of 2.28% y-o-y.

Total deposits of the bank stood at Rs 9.49 lakh crore as on September 30, 2020, up 12% y-o-y. The domestic current account savings account (CASA) share improved to 32.77% from 32.03% a year ago. Canara Bank’s shares on the BSE closed at Rs 85.60 on Thursday, down 1.67% from their previous close. The results were declared after the close of trade.

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