Canara Bank posts Rs 406-crore profit in first results as amalgamated entity

Canara Bank has 22.67% of its loan book under moratorium, which corresponds to 22.82% of the number of loan accounts.

Public sector lender Canara Bank on Wednesday reported a Rs 406-crore net profit in the June quarter of FY21, as against a loss of Rs 651 crore a year ago in the first set of numbers announced as an amalgamated entity.

Syndicate Bank was merged with Canara Bank, effective April 1. The profit came on the back of an improvement in income and a marginal drop in provisions for the merged entity, as against comparable figures for the two banks a year ago.

The bank reported a total income of Rs 20,686 crore, up 2.7% year-on-year (y-o-y). Net interest income (NII) — the difference between interest earned and interest expended — stood at Rs 6,096 crore, up 21% y-o-y. Provisions fell 0.6% y-o-y to Rs 3,879 crore. Canara Bank’s operating profit rose 32% y-o-y to Rs 4,285 crore. The net interest margin (NIM), a key measure of profitability, rose 33 basis points (bps) sequentially to 2.84%.

Canara Bank has 22.67% of its loan book under moratorium, which corresponds to 22.82% of the number of loan accounts. In the retail segment, 30.33% of the book was under moratorium, while in the micro, small and medium enterprises (MSME) segment, the share of the moratorium book was 30.22%. Over 24% of the agri book and 16.75% of the corporate book were under moratorium.

The bank showed an improvement in terms of asset quality. Gross non-performing assets (NPAs) as a percentage of total advances fell 55 bps on a sequential basis to 8.84% and the net NPA ratio declined 39 bps to 3.95%. In absolute terms, GNPAs stood at Rs 57,526 crore, while net NPAs stood at Rs 24,355 crore at the end of Q1FY21. Slippages during the quarter were to the tune of Rs 1,422 crore, down from Rs 5,859 crore a year ago.

Gross advances of the bank stood at Rs 6.5 lakh crore as on June 30, 2020 with growth of 3.25% y-o-y. Total deposits of the bank stood at Rs 9.09 lakh crore as on June 30, 2020, up 4.56% y-o-y. The domestic current account savings account (CASA) share improved to 33.82% from 31.38% a year ago.

Canara Bank’s shares on the BSE closed at Rs 103.15 on Wednesday, down 1.24% from their previous close. The results were declared after the close of trade.