Canara Bank Q1 profit rises by 9.9%

Public sector lender Canara Bank's net profit in June quarter grew by 9.9 percent year-on-year to Rs 251.6 crore, but the higher provisions capped growth. It was driven by net interest income, other income and operating income.Net interest income, the difference between interest earned and interest expended, increased 17.6 percent to Rs 2,713.2 crore from Rs 2,307 crore on year-on-year basis.

Other income or non-interest income during the quarter shot up 33 percent to Rs 2,108.5 crore and operating profit grew by 36 percent to Rs 2,472.38 crore compared with year-ago quarter.

It was mixed performance from the bank as profit was expected at Rs 304.3 crore and net interest income was estimated at Rs 2,613.6 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Asset quality deteriorated further in the quarter ended June 2017 as gross non-performing assets (NPA) jumped 93 basis points to 10.56 percent and net NPA rose 76 bps to 7.09 percent on sequential basis.In absolute terms, gross NPA increased 10.1 percent sequentially to Rs 37,658 crore and net NPA rose 12.2 percent to Rs 24,301 crore in April-June quarter.

Canara Bank said it has shifted securities from HTM (held-to-maturity) to AFS (available for sale) category amounting to Rs 6,187 crore in Q1. Provisions for bad loans shot up sharply by 47.6 percent year-on-year to Rs 2,204 crore but sequentially declined 18.6 percent in the quarter gone by. Provision coverage ratio improved to 54.52 percent during the quarter against 52.5 percent in previous quarter.