Canara Bank net zooms 83 percent in first quarter

Bangalore, July 17 (IANS) State-run Canara Bank reported net profit of Rs.1,013 crore for the first quarter (April-June) of this fiscal (2010-11) as against Rs.555 crore in the like period of the previous fiscal (2009-10), registering a whopping 83 percent year-on-year (YoY) growth.

‘We have posted a record net profit in the first quarter owing to nine-fold jump in income from treasury operations and net interest income (NII) growing by 34 percent YoY to Rs.1,728 crore from Rs.1,291 crore year ago,’ Canara Bank chairman and managing director A.C. Mahajan told reporters here.

The bank’s total income increased 17 percent YoY to Rs.5,895 crore from Rs.5,032 crore owing to profit from treasury operations jumping to Rs.224 crore from Rs.28 crore year ago and non-interest income increasing to Rs.734 crore from Rs.474 crore year ago, a growth of 55 percent YoY.

Operating profit also shot up 61 percent to Rs.1,483 crore during the quarter under review (Q1) from Rs.921 crore year ago.

‘Similarly, return on assets (RoA) increased to 1.55 percent from 1.02 percent YoY, while net interest margin (NIM) improved to 3.01 percent from 2.7 percent YoY,’ Mahajan said.

The listed bank’s capital adequacy ratio (CAR), however, declined to 12.44 percent from 13.59 percent year ago, as under the new regulatory norm, only annual net profit has to be factored to determine the CAR.

Cost of deposits too declined to 5.69 percent in Q1 from 6.48 percent year ago, as also yield on advances to 9.35 percent from 10.05 percent.

Total business registered 23.4 percent YoY growth to Rs.412,649 crore in Q1 from Rs.334,325 crore, with deposits increasing 23.3 percent YoY to Rs.238,855 crore from Rs.193,657 crore and advances 23.6 percent YoY to Rs.173,794 crore from Rs.140,668 crore.

‘We have set a target of Rs.5 lakh crore (Rs.5 trillion) for total business, comprising Rs.285,000 crore from deposits and Rs.215,000 crore in advances,’ Mahajan noted.

The bank has projected a credit growth of about 20 percent during this fiscal.

The bank was also able to limit its expenses by 7.3 percent YoY.

‘We have also contained our operational expense by 15.9 percent to Rs.978 crore as against Rs.844 crore a year ago,’ Mahajan added.

The bank has reduced its gross and net non-performing assets (NPAs) to 1.46 percent and one percent in Q1 from 1.74 percent and 1.29 percent year ago respectively.

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