Canara Bank posted a 75% year-on-year rise in net profit to Rs 3,534.8 crore for the fiscal first quarter ended June compared to Rs 2,022.03 crore a year before.

NII and NIM

The public sector lender’s net interest income (NII) rose 28% to Rs 8,666 crore versus Rs 6,784.7 crore in the same quarter last year. NII is the difference between interest earned on loans and interest paid to depositors.

Net interest margin (NIM) stood at 3.05% as against 2.95% in the previous quarter and 2.78% in the year-ago period.

Canara Bank’s pre-provision operating profit rose 15% year-on-year to Rs 7,604.02 crore from Rs 6,606.23 crore.

Provisions

Provisions for the first quarter fell sharply by 26% to Rs 2,718.93 crore, of which provisions for non-performing assets were Rs 2,418 crore. In the preceding quarter it stood at Rs 3,094.95 crore and in the year-ago period it was at Rs 3,690.05 crore.

Provision coverage ratio (PCR) was at 88.04%, compared to 88.31% in the preceding quarter and 84.51% a year ago.

Credit cost fell to 1.10% from 1.17% quarter-on-quarter and 1.38% year-on-year.

Asset quality

Asset quality of the bank improved, with gross non-performing assets (NPA) ratio declining by 20 basis points to 5.15% in the June quarter from 5.35% in the preceding quarter and 6.98% in the year-ago period. 

Net NPA ratio fell 16 basis points to 1.57%, from 1.73% in the previous quarter and 2.48% a year ago.

In absolute terms, Canara Bank’s gross NPA in Q1FY24 fell 0.9% to Rs 45,727.4 crore from Rs 46,159.5 crore quarter-on-quarter. In the year-ago period, it was at Rs 54,734 crore.

Net NPA fell 6.2% to Rs 13,461.4 crore from Rs 14,349.3 crore, quarter-on-quarter. In the year-ago period, it was at Rs 18,505 crore.

Slippages increased to Rs 3,428 crore in the quarter ended June 2023, from Rs 2,973 crore sequentially.

Advances

Gross advances for the first quarter were up 13% to Rs 8.87 lakh crore.

Segment-wise, retail credit jumped 11% to Rs 1.42 lakh crore, while gold and housing loans were up 29% and 14% respectively.

Deposits

Total domestic deposits rose 4.9% year-on-year to Rs 11,04,506 crore from Rs 10,52,907 crore. Global deposits rose 6.5% year-on-year to Rs 11,92,470 crore.

Retail term deposits were up 3% to Rs 4.66 lakh crore.

Capital adequacy

Capital adequacy ratio stood at 16.24%for the April-June period, compared to 16.68% in the preceding quarter and 14.91% in the year-ago period.