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Informist, Monday, Jan. 27, 2025

 

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--Canara Bank Oct-Dec net profit INR 41.04 bln
--Analysts saw Canara Bank's Oct-Dec net profit INR 37.91 bln
--Canara Bank Oct-Dec net profit INR 41.04 bln vs INR 36.56 bln yr ago
--Canara Bank Oct-Dec total income INR 361.14 bln vs INR 323.34 bln year ago
--Canara Bank Oct-Dec provisions INR 23.98 bln vs INR 18.99 bln year ago
--Canara Bank gross NPA ratio 3.34% as on Dec 31 vs 3.73% qtr ago
--Canara Bank net NPA ratio 0.89% as on Dec 31 vs 0.99% qtr ago
--Canara Bank Oct-Dec NPA provisions INR 19.82 bln vs INR 21.07 bln year ago
--Canara Bank Apr-Dec net profit INR 120.24 bln vs INR 107.97 bln year ago
--Canara Bank Basel III capital adequacy ratio 16.44% as on Dec 31
--Canara Bank Apr-Dec total income INR 1.05 tln vs INR 936.29 bln year ago
--Canara Bank provision coverage ratio 91.26% as on Dec. 31
--Canara Bank: Additional provision INR 4.55 bln for 10 accts as of Dec 31
--Canara Bank Oct-Dec net interest income INR 91.49 bln, down 2.9% year ago
--Canara Bank Oct-Dec net interest margin 2.71% vs 2.86% quarter ago
--Canara Bank Oct-Dec credit cost 0.89% vs 0.97% in Jul-Sept
--Canara Bank Oct-Dec fresh slippages INR 23.63 bln vs INR 23.09 bln qtr ago
--Canara Bk retail lending book at INR 2.08 tln as on Dec 31, up 35.5% on yr
--Canara Bank global deposits at INR 13.69 tln as on Dec 31, up 8.44% YoY
--Canara Bank global advances at INR 10.50 tln as on Dec 31, up 10.45% YoY
--Canara Bank global credit-deposit ratio at 76.65% as on Dec 31
--Canara Bank loan to NBFCs up 5.05% on year in Oct-Dec
 

 

NEW DELHI – Canara Bank on Monday reported a 12.3% increase in its net profit for the quarter ended December, thanks to a 5.9?ll in its provisions for bad loans, although its net interest income contracted from a year ago. The state-owned bank's bottom line for Oct-Dec was INR 41.04 billion, higher than analysts' expectation of INR 37.91 billion. However, shares of the bank were down 4.9% at INR 91.99 on the National Stock Exchange at 1440 IST.

 

In Oct-Dec, the bank's net interest income fell 2.9% on year to INR 91.49 billion, with total income for the quarter up 11.7% at INR 361.14 billion, aided by a 35.1% jump in other income at INR 58.02 billion. Non-interest income in Oct-Dec was driven by a threefold increase in profit on sale of investments from treasury at INR 9.45 billion, while recoveries from written-off accounts were up 21.3% at INR 20.08 billion.

 

For Apr-Dec as a whole, the bank's net profit was INR 120.24 billion, while total income was INR 1.05 trillion. 

 

While the quarterly net profit was higher than what brokerages had expected, Canara Bank saw deterioration in its profitability metrics, with the net interest margin falling to 2.71% in Oct-Dec from 2.86% in Jul-Sept and 3.03% in the third quarter of 2023-24 (Apr-Mar). For the nine months ended December, the bank's net interest margin was 2.83%, which it expects to rise to 2.90% for FY25 as a whole.

 

The bank saw the quantum of its low-cost current account, savings account deposits fall by 2.6% as on Dec. 31 compared to Sept. 30, with the CASA ratio at 30.00%. The bank is guiding for a domestic CASA-to-domestic deposit ratio of 33.00% by the end of FY25. With CASA deposits falling, the bank saw its cost of deposits rising 2 basis points sequentially to 5.72%, with the cost of funds rising similarly to 5.28%.

 

As on Dec. 31, the bank's gross advances stood at INR 10.50 trillion, up 10.5% on year, while global deposits were up 8.4% at INR 13.69 trillion, resulting in a credit-deposit ratio of 76.65% as on Dec. 31. Within overall loans, the retail book stood at INR 2.08 trillion at the end of December, registering growth of 35.5% year-on-year, although credit to agriculture and allied sectors was up only 0.5%. Loans to non-banks were up 5.1%, with total domestic gross advances up 9.6%.

 

 

While provisions and contingencies were 26.3% higher at INR 23.98 billion for Oct-Dec, the amount of money set aside for bad loans was down 5.9% at INR 19.82 billion. Fresh slippages in the quarter stood at INR 23.63 billion, down from INR 26.97 billion a year ago but slightly higher than Jul-Sept's INR 23.09 billion. The bank said in its notes to accounts that it held additional provision of INR 4.55 billion as on Dec. 31 for 10 accounts impacted by the Reserve Bank of India's June 2019 circular on the prudential framework for resolution of stressed assets.

 

While the bank's Oct-Dec credit cost edged down to 0.89% from 0.97% both in Jul-Sept and a year ago, the bank has said it will be 1.10% for the full year.

 

Cash recoveries and upgrades fell to INR 7.80 billion and INR 4.60 billion, respectively, while write-offs were largely unchanged from a year ago at INR 38.96 billion. Total cash recovery, including from written-off accounts, was INR 31.78 billion in Oct-Dec.

 

As at the end of December, Canara Bank's gross non-performing assets ratio declined to 3.34% from 3.73% a quarter ago and 4.39% a year ago, while net NPAs were down at 0.89% from 0.99% at the end of September and 1.32% at the end of December 2023. The provision coverage ratio increased to 91.26% as on Dec. 31, while the capital adequacy ratio was 16.44%. The bank's guidance for the gross and net NPA ratios as at the end of March is 3.50% and 1.10%, respectively.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Siddharth Upasani

Edited by Avishek Dutta

 

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