Canara Bank aims to cut gross NPA to 2.5%

Bank's gross NPA ratio stood at 2.8% in the third quarter of the current financial year and net NPA ratio was at 2.3%

State-owned Canara Bank aims to reduce the gross non-performing assets to 2.5 per cent in the last quarter of the present fiscal from the present level of 2.7 per cent.

“The whole banking industry asset quality is a concern. Gross NPA ratio for the industry varies between 5-10 per cent. But for us it is only 2.7 per cent.

“We are hopeful that by March we will bring it down to 2.5 per cent or maintain at 2.6-2.7 per cent, which is the best in the sector,” Canara Bank Chairman and Managing Director R K Dubey said last late evening.

Dubey was in the city to inaugurate five e-lounges of the bank.

The Bangalore-based lender’s gross NPA ratio stood at 2.79 per cent in the third quarter of the current financial year and net NPA ratio was at 2.3 per cent.

The public sector bank witnessed a marginal deterioration in its asset quality during the December quarter of 2013-14 compared with same period previous year.Higher provisioning for NPAs in the third quarter led Canara Bank’s profit down by 42.38 per cent to Rs 409 crore.

The bank said its growth grew by over 30 per cent in the last financial year, while the industry expanded by only 14-15 per cent.

Dubey said although the bank’s corporate lending was subdued due to market conditions, its retail lending jumped sharply.

The bank said it was planning to open more branches in banks-scarce rural areas in the states like West Bengal and Odisha.

The bank will open 100 branches in West Bengal at those locations where panchayats have been ordered to offer 500 sq ft of space for each branch.

“We are ready with 35 branches and waiting for the Bengal Chief Minister (Mamata Banerjee) to inaugurate them,” he said.