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Canara Bank Q1 results: Net profit rises nearly three-fold to Rs 1,177 cr

Mumbai: Public sector lender ’s net profit nearly tripled to Rs 1,177 crore at the end of the June quarter on a sharp rise in fee income and treasury gains. The lender reported a net profit of Rs 406 crore in the year-ago period.

Non-interest income, including fees and treasury gains, rose 67.5% year-on-year to Rs 4,438 crore.

Net interest income was flat at Rs 6,147 from Rs 6,096 last year.

Asset quality improved with the gross NPA ratio at 8.5% during the quarter from 8.84% a year ago. The net NPA ratio stood at 3.46% from 3.95%. Total provisions rose nearly 18% year-on-year to Rs 4,574 crore at the end of the June quarter. This included a one-time income tax provision of Rs 845 crore. The bank also holds Covid-related provisions of Rs 842 crore.

The bank reported Rs 4,253 crore of fresh slippages, which fell sharply on a sequential basis. Around 19% of slippages came from the retail segment and 56% from MSMEs. Loans worth Rs 13,234 crore were restructured under the Covid 2.0 scheme, of which Rs 7,610 crore were from the retail sector and Rs 3,331 crore from MSMEs.

“For the retail and MSMEs borrowers who we have assisted with the Covid recast scheme a part of them have started to pre-pay and we are hopeful that as the business momentum recovers a large part of these accounts will normalise,” said LV Prabhakar, managing director, Canara Bank. “As of June 30, our collection efficiency is 91%.”

Net interest margin for the quarter fell to 2.71% from 2.84% a year ago. Total loans grew by 5.94% to Rs 6.6 lakh crore, of which retail loans grew at 9.57% while agriculture loans rose 17.03%. The bank said it is targeting an annual credit growth rate of 7-8%.

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