Canara Bank profit up 10%

Owing to higher growth in core earnings, public sector Canara Bank posted a net profit of Rs 1007.88 crore for the quarter ended September, a 10.7 per cent rise from Rs 910.52 crore in the corresponding period last year.

At Rs 6,077 crore, income rose 8.4 per cent, from Rs 5,602 crore in the same period last year.

“Despite muted growth in treasury income, we have registered a net profit of above Rs 1,000 crore for the second time this financial year, due to higher growth in net interest income,” said Chairman and Managing Director S Raman.

Net interest income rose 52.5 per cent to Rs 2,003 crore, against Rs 1,314 crore in the previous year. The bank was able to expand margins despite the increasing cost of deposits on account of hardening interest rates.

From 2.66 per cent an year ago, the net interest margin expanded to 3.16 per cent.

“We were able to contain our cost of deposits to 5.69 per cent in the quarter, as against 6.47 per cent in the same period last year. Going ahead, we expect a secular trend in the interest rate regime with no significant rise in cost of deposits,” Raman said.

He added the yield on advances would rise in the near future as the bank had replaced around Rs 10,000-11,000 crore short-term loans with high-yielding advances.

The bank, which significantly cut exposure to bulk deposits to protect margins this quarter, plans to so the same for the rest of the financial year.

The bank’s overall business registered a 21 per cent rise to Rs 4.25 lakh crore.

“With a net interest margin above three per cent, we hope to reach a business of Rs five lakh crore by end of this financial year,” he said. While the bank registered a 25 per cent increase in deposits to Rs 249,187 crore, advances grew 20.2 per cent to Rs 176,071 crore.

Yes Bank net up 58%
Owing to strong growth in interest income, private sector lender Yes Bank reported a net profit of Rs 176.3 crore for the quarter ended September, a 57.8 per cent jump from Rs 111.7 crore an year ago.

Net interest income, or interest earned on loans less interest expended on deposits, grew 77.9 per cent to Rs 313.2 crore, against Rs 176.0 crore in the September 2009 quarter.

However, non-interest income was relatively flat at Rs 176.3 crore in the September quarter compared to Rs 111.7 crore an year ago.

Within the non-interest income, revenue from financial advisory was Rs 63.7 crore this quarter compared to Rs 56.3 crore last year Also, transaction banking income rose to Rs 38.3 crore from Rs 35.3 crore an year ago.