Higher core earnings push Canara Bank net up 79%

Public sector lender Canara Bank registered 79 per cent growth in net profit to Rs 899 crore in the fourth quarter of 2010-11, on the back of increased net interest income and lower provisioning along with sound recovery from non-performing asset (NPA) accounts.

The Bangalore-headquartered bank had reported net profit of Rs 503 crore in the corresponding period last year.

Total income of the bank rose 33.5 per cent to Rs 7,351 crore during this period, compared with Rs 4,823 crore reported in the year-ago period. Operating profit increased 18.53 per cent to Rs 1,695 crore during this period, while net interest income grew 23.5 per cent to Rs 1,973 crore.

“Though there is an overall inflationary environment, we are confident that the bank will be able to maintain the present growth rate in the current financial year,” Chairman and Managing Director S Raman said.

On an annual basis, net profit of the bank increased by 33.2 per cent to Rs 4,026 crore, compared with Rs 3,021 crore reported a year ago.

Total income of the bank grew 19.2 per cent to Rs 25,767 crore in 2010-11, supported by 22.3 per cent growth in interest income from advances. Net interest income rose 37.7 per cent to Rs 7,823 crore, as compared with Rs 5,681 crore reported earlier. Net interest margin increased 32 basis points to 3.12 per cent from 2.8 per cent a year ago.

“Due to rising cost of funds, net interest margin may see some kind of dip in the first quarter of current financial year. However, we will be able to maintain margin level at three per cent for FY12,” Raman added.

The bank has recovered around Rs 2,032 crore from NPA accounts in 2010-11. It plans to recover Rs 2,500 crore in the current financial year.