Canara Bank Q4 profit flat as interest income dips

Canara Bank reported near flat growth in net profit at Rs.612.96 crore in the fourth quarter ended March 2015 on decline in interest income and higher expenses. The Bengaluru- headquartered public sector bank had reported a net profit of Rs.610.83 crore in the corresponding year-ago quarter.

Net interest income, the difference between interest earned and expended, fell 1.93 per cent to Rs.2,486 crore (from Rs.2,532 crore in the corresponding last quarter). The non-interest income grew 24 per cent to Rs.1,325.81 crore (Rs.1,070 crore). Operating profit declined 8 per cent to Rs.1,732.53 crore (Rs.1882.10 crore). The bank made a total provision of Rs.1,120 crore (Rs.1,271 crore), of which, provision for non-performing assets (NPAs) stood at Rs.782 crore (Rs.802 crore)

Gross NPAs as a percentage of total advances rose to 3.89 per cent during the March quarter (2.49 per cent), while the NPAs went up to 2.65 per cent (1.98 per cent). The bank saw fresh slippages of ₹2,804 crore during the quarter, said PS Rawat, Executive Director and Acting MD and CEO.

“Going by the trend of stressed assets at the industry level, the bank witnessed stress in sectors, such as infrastructure, power, road, iron and steel and textiles,” Rawat said.

Full-year performance

For the year-ended March 2015, the bank reported an 11 per cent growth in net profit at Rs.2,703 crore (Rs.2,438 crore).

The Canara Bank board recommended a dividend of Rs.10.5 a share (105 per cent on par value of Rs.10 each). Tracking the results, the Canara Bank scrip touched a yearly low of Rs.334.25 on the BSE in intra-day trade but recovered to close at Rs.340.20 on Monday.

Commenting on the year ahead, Rawat said the bank would focus on CASA (current account, savings account) deposits, improving recovery and managing NPAs better.

“We are expecting a credit growth of 14 per cent in the current financial year,” Rawat said, adding that it would depend on how the economy grows.

The bank would require a capital of about Rs.3,000 crore to sustain the business growth this year.

“We have enough head room to raise the capital, but have not decided on how and when to go about it,” he added.

Canara Bank had recently raised ₹1,520 crore from Life Insurance Corporation of India by issuing four crore preference shares.