Canara Bank Q2: Analysts expect profit flat at Rs 853cr YoY
Public sector lender Canara Bank's profit after tax is expected to remain unchanged at Rs 853 crore in the three months period ended September 2012 as against Rs 852 crore in a year ago period.
November 06, 2012 / 09:43 IST
Public sector lender Canara Bank's profit after tax is expected to remain unchanged at Rs 853 crore in the three months period ended September 2012 as against Rs 852 crore in a year ago period.
Net interest income too is likely to be unchanged at Rs 1,967 crore as against Rs 1,962 crore during the same period.The stock fell 3 percent on a day when June quarter numbers announced. Net interest income rose only 3 percent to Rs 1,844 crore while profit after tax was up by 7 percent YoY to Rs 775 crore with asset quality worsening in the April-June quarter. Analysts on an average feel the loan and deposit growth is expected to be subdued at 7 percent and 10 percent, respectively. The bank is continuing to shrink its SME and retail book. IN previous quarter, SME and retail book shrank by 8 percent QoQ each, constituting 24.3 percent of the overall advances. SME and retail book proportion in the total advances has seen consistent contraction over the last three years.Analysts are expecting net interest margins to either remain flat or decline to 2 percent. In previous quarter, NIMs fell by 10 basis points QoQ to 2.4 percent. The management, post the June quarter numbers, had said the guidance on slippages was Rs 1000 crore odd for the next three quarters. However, analysts expect slippages to be Rs 1400 -1500 crore in the September quarter.In the June quarter, slippages were Rs 1,400 crore as against Rs 1,120 crore in March quarter. Investors should watch out for whether asset quality is cushioned by higher recovery / upgrades. Last quarter, the management said they did not foresee any significant restructuring going forward as the bank has no major exposure to big corporates which have been referred to CDR. Investors should watch for SEB exposure; the bank had restructured Rs 5500 crore (worth of loans) out of the total SEB exposure of Rs 12,000 crore. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
