State-owned Canara Bank has reported standalone net profit of Rs 1,011 crore for the March quarter, turning around from the loss of Rs 3,259 crore a year ago. This was on the back of a higher net interest income and lower provisioning for bad loans.

State-owned Canara Bank has reported standalone net profit of Rs 1,011 crore for the March quarter, turning around from the loss of Rs 3,259 crore a year ago. This was on the back of a higher net interest income and lower provisioning for bad loans.

The bank's net interest margin (NIM) widened to 2.75% for the quarter ended 31 March 2021 from 2.5% a year ago. For the December quarter, NIM was higher at 2.8%.

Gross non-performing assets (NPAs) stood at 8.93%, improving from 9.39% a year ago. As of 31 December 2020, gross NPA was lower at 7.46% on account of the Supreme Court approved delay in NPA recognition.

The net NPA ratio stood at 3.82% compared to 4.34% a year ago.

The lender is eyeing about Rs 15,000 crore of recovery this fiscal while expecting fresh slippages from the MSME, agriculture and corporate sectors on account of the second wave of the pandemic.

Canara Bank managing director LV Prabhakar said over two lakh one-time settlement (OTS) accounts were settled in FY21 and cash recovery was also significant. Cash recovery, during the final quarter of FY21, was Rs 2,238 crore. The bank upgraded Rs 356 crore of accounts during the year.

Prabhakar expects fresh slippages, which stood at Rs 14,495 crore in the March quarter, to be at Rs 3,000-4,000 crore in Q1 FY22 and Rs 14,000-15,000 crore during the entire FY22. As against this, recoveries during FY22 is likely to be Rs 14,000-15,000 crore.

The corporate credit demand is still not visible with no fresh capital investment proposals, managing director LV Prabhakar said.

For the quarter ended March 2021, provision for NPAs fell to Rs 4,428 crore from Rs 7,939 crore a year ago.

The provision coverage ratio (PCR) rose to 79.68% as of March 2021, from 76.95% a year ago. Going forward, the bank will maintain a provision of 80%, Prabhakar said.

The bank's loan book grew 3.68% year-on-year to Rs 6.75 lakh crore. Corporate advances, however, shrunk 4.64% to Rs 2.95 lakh crore. Retail loans grew 12%.

The bank’s current focus is to provide finance to hospitals and the medical industry. “We have already started sanctioning and disbursing amounts to these sectors. Going forward, we are planning to disburse about Rs 4,000-4,500 crore to the medical sector.

Domestic deposit grew 10.74% to Rs 9,63,306 as of March 2021.

The bank’s operating profit jumped to Rs 5,703 crore for the quarter ended 31 March 2021, from Rs 2,041 crore in the same quarter a year ago. Interest income rose 35% at Rs 16,316 crore from Rs 12,047 crore. Other income spiked to Rs 5,207 crore as against Rs 2,175 crore a year ago.