Canara Bank Q1 net nearly flat on higher provisions

Moneycontrol Bureau

South-based public sector lender Canara Bank first quarter (April-June, FY14) net profit nearly remained flat at Rs 792 crore as against Rs 775 crore a year back, up merely 2 percent year-on-year. A spike in provisions and contingences, which grew 119 percent y-o-y to Rs 916 crore capped the bank’s profit margin.
However, the net interest income or the difference between interest earned and paid out, rose about 8 percent to Rs 1,991 crore. Also read: Is corruption a common practice in corporate India?
During the quarter, the other income component, which is not considered as the core business of banking, surged 79 percent y-o-y to Rs 1,238 crore. This saved the bank from reporting a dip in the net profit.
The gross non-performing assets (NPAs) shot up 63 percent y-o-y to Rs 7,329 crore. Net NPAs too ballooned 65 percent y-o-y to Rs 6,209 crore during the three-month period.
The bank expanded its loans at a muted pace of just 3 percent y-o-y to around Rs 2.50 lakh crore while deposits rose at a higher pace of 7 percent to Rs 3.82 lakh crore.