Canara Bank reports 12% rise in Q1 net profit on higher interest income

State-run Canara Bank Ltd reported a surprise 11.9 per cent rise in first-quarter net profit on higher interest income while its bad-loan provisions increased slightly.

Net profit was Rs 2.81 billion ($40.9 million) for the three months ended June 30, compared with Rs 2.52 billion a year ago, the bank said in a statement

Eight analysts on average had expected a loss of Rs 10.96 billion,  according to Thomson Reuters.

Gross bad loans as a percentage of total loans was 11.05 per cent at end-June, lower than 11.84 per cent three months earlier, but still higher than 10.56 per cent a year ago.

The bank reported mark-to-market losses of Rs 1.51 billion in the quarter as it opted to spread bond losses over four quarters as allowed by the central bank.

The remaining losses of Rs 4.53 billion will be distributed over the next three quarters, Canara Bank said.