Canara Bank Q1 net nearly triples to Rs 1,177 cr as provisions dip

Net interest income rose by just 0.84 per cent in Q1FY22 to Rs 6,147 crore from Rs 6,096 crore a year ago

Public sector lender Canara Bank on Tuesday reported net profit of Rs 1,177 crore for the June quarter, a 190 per cent rise over Rs 406 crore last year, helped by higher non-interest income and a fall in provisions for bad loans.
 
The Bengaluru-based lender’s stock ended 1.47 per cent higher on the BSE at Rs 148.8.
 
In a BSE filing, the bank said its net interest income rose just 0.84 per cent year-on-year (YoY) in Q1FY22 to Rs 6,147 crore versus Rs 6,096 crore.
 
Net interest margin fell to 2.71 per cent for Q1 against 2.84 per cent in the year-ago period. However, non-interest income rose 67.47 per cent YoY to Rs 4,438 crore, from Rs 2,650 crore in Q1FY21.

Asset quality profile improved with gross non-performing assets down to 8.5 per cent in June, from 8.84 per cent last year. Net NPA also fell to 3.46 per cent, from 3.95 per cent in June 2020. Its provision coverage ratio improved to 81.18 per cent, from 78.95 per cent a year ago.
 
At Rs 2,335 crore, provisions for non-performing assets fell 34.23 per cent, from Rs 3,550 crore in Q1FY21.
 
Under the Covid-19 resolution framework 2.0, the bank has restructured loans worth Rs 13,234 crore for 0.35 million accounts.
 
Advances grew 5.23 per cent to Rs 6.84 trillion, while deposits grew 12.34 per cent to Rs 10.21 trillion. The retail loan portfolio rose 9.6 per cent YoY to Rs 1.15 trillion.
 
As a step to fortify financial profile, the bank plans to raise Rs 2,500 crore of equity capital from institutional investors in the current financial year.
 
It is also looking at issuing additional Tier -1 bonds (AT-1 bonds) worth Rs 4,000 crore and tier II bonds worth Rs 2,500 crore in FY22.
 
 The bank’s total capital adequacy ratio was at 13.36 per cent with tier I of 10.34 per cent.