Canara Bank reports Q4 profit at Rs 1,010 crore

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Mumbai: State-owned Canara Bank on Tuesday reported a standalone profit after tax (PAT) of Rs 1,010 crore in the three months ended March 2021 on higher net interest income and lower provisioning for bad loans.

The bank amalgamated Syndicate Bank with itself effective April 1, 2020. The financials as of March to December 2020 and March 2021 are combined figures of both the banks, the bank said in an investor presentation.

Accordingly, the amalgamated entity had reported a standalone net loss of Rs 6,567 crore in the quarter ended March 2020.

As per the filing to exchanges, the bank had reported a pre-amalgamation standalone net loss of Rs 3,259.33 crore in the quarter ended March 2020. Its consolidated net profit stood at Rs 1,195.78 crore as against a net loss of Rs 3,209.98 crore in the March 2020 quarter.

The lender said standalone and consolidated figures of the quarter ended March 2020 are related to the bank’s financials of the pre-amalgamation period, hence not comparable with post amalgamation financials for the quarter ended March 2021.

“We have tried to strengthen the balance sheet by making aggressive provisions and also, wherever required, we have ensured that all the necessary steps have been taken,” the bank’s managing director and CEO L V Prabhakar told reporters.

Net interest income (NII) grew by 9.87% to Rs 5,589 crore from Rs 5,087 crore in the corresponding quarter of the previous year. Net interest margins (NIM) stood at 2.75% as against 2.51% in March 2020.

Gross non-performing loans (GNPAs) stood at 8.93% as of March 2021 against 9.39% as of March 2020. The net NPA ratio stood at 3.82% compared to 4.34%.

Prabhakar said in the financial year 2020-21, more than two lakh one-time settlement (OTS) accounts were settled and cash recovery was also significant.

Cash recovery during the March 2021 quarter was to the tune of Rs 2,238 crore. It upgraded Rs 356 crore of accounts during the year. Fresh slippages in the quarter stood at Rs 14,495 crore. The bank expects fresh slippages of around Rs 3,000-4,000 crore in Q1 FY22 and about Rs 14,000-15,000 crore during the entire FY22, Prabhakar said. Recoveries during FY22 is likely to be close to Rs 14,000-15,000 crore, he added.

The provision coverage ratio (PCR) improved to 79.68% as of March 2021 from 76.95% as of March 2020. Prabhakar said going forward the bank will be maintaining a provision of 80%.

Provision for NPAs declined to Rs 4,428 crore in the March 2021 quarter from Rs 7,939 crore in the year-ago period. Capital to risk (weighted) assets ratio (CRAR) stood at 13.18%. Out of which tier-I was at 10.08% and tier-II at 3.10%.

Domestic deposit grew 10.74% to Rs 9,63,306 crore as of March 2021 and advances increased by 5.51% to Rs 6,52,558 crore. Retail advances grew by 12%. Prabhakar said the bank at present is focusing on providing finance to hospitals and the medical industry.

“We have already started sanctioning and disbursing amounts to these sectors. Going forward, we are planning to disburse about Rs 4,000-4,500 crore to the medical sector,” he said. The bank’s scrip ended at Rs 146.65 apiece, down 4.52% on BSE on Tuesday.