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Canara Bank reported a 200 per cent year-on-year (y-o-y) jump in second quarter net profit at ₹1,333 crore against ₹444 crore in the year-ago period, supported by healthy growth in other income and lower loan loss provisions.
Net interest income (difference between interest earned and interest expended) was down a shade at ₹6,273 crore (₹6,305 crore in the year ago period).
Non-interest income, comprising fee-based income, trading income, recovery in written-off accounts, and others, was up 37.54 per cent y-o-y at ₹4,268 crore (₹3,103 crore).
Loan loss provisions declined 24 per cent y-o-y at ₹2,678 crore (₹3,533 crore).
Slippages and recovery
Fresh slippages during the quarter increased by ₹6,525 crore (₹4,253 crore in the preceding quarter). This includes ₹3,200 crore exposure to the SREI Group.
The public sector bank made higher cash recovery of ₹3,002 crore (₹1,598 crore in the preceding quarter). Upgradation and write-offs amounted to ₹2,671 crore (₹2,292 crore) and ₹1,585 crore (₹2,574 crore), respectively.
Gross non-performing assets (NPAs) position improved 8 basis points to 8.42 per cent of gross advances against 8.50 per cent as on June-end 2021.
Net NPA position improved 25 basis points to 3.21 per cent of net advances against 3.46 per cent as on June-end 2021.
LV Prabhakar, MD & CEO, observed that going forward, the bank’s balancesheet will strengthen further, with gross non-performing assets (excluding transfer of stressed assets to the National Asset Reconstruction Company) expected to decline to at least 7.5 per cent by March-end 2022 and credit growth (global) projected at 7.5 per cent for FY22, seen picking up steam from third quarter onwards.
The bank recovered about ₹1,700 crore from DHFL’s corporate insolvency resolution process (CIRP) and made 50 per cent provision towards its exposure to the SREI Group, which has become a non-performing account, Prabhakar said.
Net interest margin declined to 2.72 per cent from 2.82 per cent as on September-end 2020.
Global (domestic plus overseas) gross advances grew about 6 per cent y-o-y to ₹6,86,813 crore.
Within domestic advances (which were up 5.71 per cent yoy), Agriculture & Allied advances grew by 13.92 per cent; retail (10.46 per cent); MSME (0.31 per cent); and corporate and others (2.23 per cent). Overseas advances increased by 9.36 per cent yoy.
Global Deposits rose about 9 per cent to ₹10,32,536 crore. Domestic deposits and overseas deposits increased by 7.61 per cent and 38.15 per cent, respectively.
The proportion of low-cost CASA deposits improved to 34.11 per cent in total domestic deposits as at September-end 2021 against 32.77 per cent as at September-end 2020.