Canara Bank Q3 net down 9% to Rs 696 cr due to higher provisioning

Gross NPAs drop 236 bps to 7.46%, net NPAs down 298 bps to 2.64%

Public sector Canara Bank on Wednesday reported a 9 per cent drop in its third quarter net profit to Rs 696 crore, taken together with financials of Syndicate Bank that merged last April, mainly due to rise in provisioning. 

Gross non-performing assets (NPA) on a consolidated basis dropped 236 basis points to stand at 7.46 per cent at the end of December 31 2020. Net NPA fell 298 basis points to 2.64 per cent. One basis point is 0.01 per cent.  

Provisioning jumped 61.25 per cent to Rs 4,686 crore for the merged entity even as most of the provisions were for the ‘others’ category. Provisioning for bad debts increased from Rs 2,488 crore in the year ago third quarter to Rs 2,657 crore in the latest third quarter, the bank's presentation filed with the exchanges showed.  The provision coverage ratio was as high as 84.9 per cent at the end of the third quarter.  

Operating profit rose 46.65 per cent year on year to Rs 5,382 crore.  Net interest income, excluding Rs s Rs 413 crore in interest reversal of deemed NPA, stood at Rs 6081 crore, rising 14.58 per cent on a year on year basis. Net interest margin, a key profitability parameter, fell from 2.82 per cent in the September quarter to 2.80 per cent in the December quarter. 

Shares of the bank fell 1.05 per cent to trade at Rs 132.20 a piece at 2.15 pm on the BSE. Sensex was down 1.85 per cent to 47,450 points.