Aided by over 43 per cent growth in net interest income, Canara Bank posted its highest-ever net profit of Rs 1,106 crore during the third quarter of this fiscal.
Though the growth in net profit over the corresponding quarter of last year is only 5 per cent, it has to be noted that last year's net profit of Rs 1,053 crore was achieved “on the back of a one-time profit on sale of investment and write-back of investment provisions during the third quarter 2009-10 of over Rs 550 crore,” said Mr H.S. Upendra Kamath, Executive Director, Canara Bank, while announcing the results.
“The net profit growth proves a stronger bottomline and better profitability as we move forward, despite muted treasury profits during the last few quarters,” he added. The bank's net interest income grew to Rs 2,119 crore (1,478 crore).
Commenting on the results, Mr S. Raman, Chairman and Managing Director, Canara Bank, said that the profit has been “entirely core-business driven.” Mr Kamath explained that both deposits and advances grew 25 per cent and 29 per cent respectively, which were higher than the industry average.
The bank increased its provisions and contingencies this quarter to Rs 157 crore (Rs 77 crore), and provisioning for taxes stood at Rs 250 crore. Its provision coverage ratio now stands at 75.91 per cent. Mr Kamath pointed out that the bank's slippages had been “successfully contained”. It made cash recovery of over Rs 1,200 crore during the quarter, he said.
Gross NPAs of the bank stood at 1.44 per cent (1.77 per cent), while net NPAs were 1.05 per cent (1.34 per cent). “The quality of assets are being tightly controlled, monitored and maintained. The delinquency ratio is below 1 per cent,” said Mr Raman.
The bank's net interest margin (NIM) stood at 3.21 per cent (2.71 per cent). “Our NIM has been steadily growing. We want to maintain it around 3.2 per cent for the entire year,” he added.
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