Canara Bank Q1 net profit grows 10 pc to Rs 3,905 cr

New Delhi, Jul 25 (PTI) State-owned Canara Bank on Thursday posted a 10 per cent rise in its net profit to Rs 3,905 crore for the first quarter ended June 30, driven by a reduction in bad loans.

The Bengaluru-based lender had earned a net profit of Rs 3,535 crore in the year-ago period.

During the quarter, the bank’s total income increased to Rs 34,020 crore against Rs 29,823 crore a year ago, Canara Bank said in a regulatory filing.

Interest income grew to Rs 28,701 crore during the period under review from Rs 25,004 crore in the corresponding quarter a year ago.

Its net interest income registered a growth of 6 per cent to Rs 9,166 crore compared to Rs 8,666 crore in the same quarter a year ago.

The net interest margin of the bank declined to 2.90 per cent against 3.05 per cent.

Going forward, “we expect the NIM to improve and end with 2.95 per cent,” Canara Bank managing director K Satyanarayana Raju said.

On the asset quality side, the bank’s gross non-performing assets (NPAs) moderated to 4.14 per cent of gross advances as of June 30, 2024, from 5.15 per cent at the end of the first quarter of the previous fiscal.

The net NPAs also came down to 1.24 per cent of the advances from 1.57 per cent at the end of the first quarter of last year.

As a result, provision for bad loans declined to Rs 2,171 crore against Rs 2,418 crore earmarked during the same quarter a year ago.

The Capital Adequacy Ratio (CRAR) marginally increased to 16.28 per cent compared to 16.24 per cent on June 30, 2023.

Its provision coverage ratio (PCR) at 89.22 per cent improved by 118 bps.

The bank aims to cross 90 per cent PCR by the end of the current fiscal, Raju said.

With regard to recovery, he said, the bank aims for Rs 1,000 crore every quarter.

Asked about the capital raising plan, Raju said, the board has approved Rs 8,500 crore for the current fiscal.

The fund would be raised from both Tier I and Tier II bonds, he said.

Besides, he said the bank has proposed to dilute stake in two subsidiaries — Canara HSBC Life Insurance and Canara Robeco Asset Management Company through listing.

In both the joint ventures, he said, the dilution would be to the extent of 25 per cent.