Canara Bank net slumps 30%

Bangalore-based public sector lender Canara Bank has reported a 30 per cent drop in net profit at Rs 503 crore for the fourth quarter ended March 31, compared with the corresponding quarter last year. The drop in net profit was mainly due to additional provisioning of Rs 400 crore towards non-performing assets (NPAs) and another Rs 70 crore towards floating provisions. A fall of 16.1 per cent in other income at Rs 710 crore also added to the drop.

“There are two things for making higher provisions. First, there were more slippages in small-value accounts of less than Rs 10 lakh. The restructured accounts of agriculture advances have slipped to the order of Rs 500 crore. Second, our provisions coverage ratio was coming down from 77 per cent to towards 70 per cent. Since our profitability was good, we felt that we should make extra provisions. We have once again taken our provisions coverage ratio to 77 per cent from 73 per cent in December 2009,” Chairman and Managing Director AC Mahajan said.