Canara Bank Q1 results: Net profit jumps 75% YoY ; asset quality improves

Canara Bank on July 24 reported a 74.8 percent year-on-year (YoY) rise in profit after tax at Rs 3,534.84 crore in the first quarter of the current financial year, boosted by an increase in net interest income and improvement in interest margins and asset quality.

The state-owned lender reported a net profit of Rs 2,022.03 crore in the year-ago period.

The Bengaluru-headquartered lender's assets quality improved in the June quarter, with gross non-performing assets (NPAs) ratio at 5.15 percent against 5.35 percent in the previous quarter and 6.98 percent in the year-ago period.

The net NPA ratio stood at 1.57 percent, better than 1.73 percent in the previous quarter and 2.48 percent in the year-ago period.

The improvement in asset quality is beneficial to a bank as fewer risky assets tend to bring down the outstanding risk-weighted assets, saving the capital for the lender.

In absolute terms, the bank's gross NPA stood at Rs 45,727 crore as on June 30, against Rs 54,734 crore in the year-ago period. The net NPA too was down at Rs 13,461 crore from Rs 18,505 crore.

In the reporting quarter, the net interest income, the difference between the interest earned on loans and paid to depositors, rose 27.72 percent on-year to Rs 8,666 crore.

The total interest income of the bank was Rs 25,004 crore in the April-June quarter, up from Rs 18,177 crore in a year ago period.

The net interest margin, an important profitability marker, was at 3.05 percent, up from 2.95 percent in the previous quarter and 2.78 percent in a year-ago period.

The global deposits of the bank rose 6.65 percent on-year to Rs 11.92 lakh crore, while domestic deposits were up 4.9 percent on-year to Rs 11.05 lakh crore.

in April-June, term deposits of state-owned lender rose 6.98 percent to Rs 7.04 lakh crore.

On the advances front, global gross advances surged 13.27 percent on-year to Rs 8.88 lakh crore and domestic gross advances rose 12.69 percent on-year to Rs 8.18 lakh crore.

In April-June, Canara Bank reported a 71.01 percent on-year fall in its treasury income to Rs 536 crore. In treasury income, profit on exchange transactions halved 75.21 percent on-year to Rs 236 crore and profit on sale of investment fell 66.93 percent on-year to Rs 294 crore, according to the investors presentation.