 "Canara Bank profits tank 87% to Rs 85 crore")
Canara Bank has reported a 87 per cent drop in its third-quarter profits at Rs 85 crore as it made higher provisions for doubtful debts.
The public sector lender had posted profits of Rs 656 crore in the year-ago quarter. Profit before tax, too, declined 87 per cent to Rs 123.6 crore from Rs 956 crore.
The bank's gross non-performing assets (NPA) grew to 5.84 per cent from 3.35 per cent in the October-December quarter in 2014. Net NPA increased to 3.9 per cent from 2.42 per cent a year ago.
Analysts rated the stock as 'neutral' as asset quality deteriorated as gross and net NPA increased significantly.
"On an absolute basis, the closing gross and net NPA increased by 41.3 per cent and 37.9 per cent quarter-on-quarter, respectively," said Vaibhav Agrawal, vice-president (research- banking), in a note.
The rise in provisions was partially due to the asset quality review conducted by the Reserve Bank of India. The classification and provision directions given by RBI should be done over the two quarters ending March 2016, he added.
Canara Bank's stock ended up 0.25 paise or 0.14 per cent to close at Rs 172.95 on the BSE on Friday.
