Canara Bank reported a 26.87% rise in net profit to Rs 3,656 crore for the fiscal third quarter ended December compared to Rs 2,881.5 crore a year ago.

The state-owned bank maintained its net interest margin (NIM) above 3% despite interest rate pressure on deposits. The lender’s NIM for the December quarter stood at 3.03% compared to 3% in the prior quarter and 3.05% a year ago.

Net Interest Income (NII) during the December quarter rose 9.5% to Rs 9,417 crore from Rs 8,600 crore a year earlier.

Other income grew 7.75% year-on-year to Rs 4,295 crore. 

“Despite pressure on interest rates on deposits, we have been able to maintain NIM above 3% …Our area of concern continues to be CASA (current account savings account). Though it has grown, it has not moved to the extent overall deposits have moved,” Canara Bank managing director and CEO Satyanarayana Raju said.

Canara Bank’s loan growth has been outpacing that of deposit growth. While domestic deposits grew 8.07% year-on-year to Rs 11,66,848 crore as on 31 December 2023, the loan book increased by 12.56% to Rs 9,01,465 crore.

While low-cost CASA deposits grew by only 5.05%, term deposits increased by 9.53%, of which retail growth was 5.92%.

On the advances side, the RAM (retail, agriculture, MSME) segment grew 14.56%. Retail credit grew 12.14% while corporate loans increased by 8.26%. The 

The bank’s gross non-performing asset (NPA) ratio, a key measure of asset quality, improved to 4.39% as of December-end from 4.76% at the end of the prior three months and 5.89% a year ago.

Net NPA ratio was at 1.32% versus 1.41% a quarter ago and 1.96% a year ago.

Provision coverage ratio (PCR) improved to 89.01% as of December-end from 86.32% a year earlier. 

Global business grew 9.87% year-on-year to Rs 22,13,360 crore as of December-end. While global deposits stood at Rs 12,62,930 crore, gross global advance was at Rs 9,50,430 crore.