State-run Canara Bank on Wednesday reported a 9 per cent decline in its standalone net profit to Rs 696 crore on higher provisioning.
The bank amalgamated Syndicate Bank with itself effective April 1, 2020. The financials as of December 2019, March, June and September 2020 are combined figures of both banks, the bank said in its investors presentation. The amalgamated entity had posted a standalone profit after tax of Rs 764 crore in the December quarter of the previous fiscal.
The pre-amalgamation standalone profit in Q3 FY21 stood at Rs 329.62 crore. The bank further reported a consolidated net profit of Rs 739.20 crore in the third quarter ended December of the current fiscal as against Rs 406.43 crore during the year-ago period. However, the consolidated profit of Q3FY21 is not comparable year-on-year.
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We want to make our balance sheet very strong and it should be future ready, the bank's managing director and CEO L V Prabhakar told reporters. The bank has an additional provisioning of Rs 1,901 crore as of today. In Q3, it did Rs 738 crore of floating provision. Apart from that, it has not recognised Rs 413 crore of interest on probable NPA. If it had added both of these, the profit could have gone more than Rs 1,500 crore, he stated.
Net-interest income grew by 14.58 per cent to Rs 6,081 crore as against Rs 5,307 crore. Its domestic net interest margins improved 26 bps. The lender reported a 210 per cent growth in its treasury income at Rs 2,016 crore as against Rs 650 crore in the same quarter of the previous fiscal.
The mix of the securities which we have has given us the leverage encash the situation and to book profit. We have a robust risk management system and it has helped us, he said. Gross non-performing assets (GNPA) ratio reduced to 7.46 per cent from 9.82 per cent last year. Net NPAs also declined to 2.64 per cent from 5.62 per cent.
Prabhakar expects GNPA to be at 8.75 per cent and net NPA at 3.90 per cent by March-end. Fresh slippages in the quarter stood at Rs 395 crore. Total cash recovery including recovery from written-off accounts stood at Rs 2,893 crore. Fresh slippages in the quarter stood at Rs 395 crore.
The lender expects recoveries worth Rs 6,000-7,000 crore in the fourth quarter, he said. Prabhakar said the lender's one-time restructuring book stands at Rs 11,000 crore.
Provision coverage ratio (PCR) improved to 84.89 per cent from 70.37 per cent in the same quarter of the previous fiscal. Its capital adequacy ratio (CRAR) stood at 13.69 per cent as at December 2020. Out of which tier-I is 10.45 per cent and tier-II is 3.24 per cent.
Its domestic advances grew 7.55 per cent to Rs 644,826 crore, and its retail lending portfolio increased by 9.33 per cent to Rs 113,835 crore. The bank's domestic deposit rose 9.49 per cent to Rs 928,325 crore.
It expects a deposit growth of 8 per cent and credit growth of 6 per cent by the end of this fiscal. The lender's scrip closed at Rs 131.15 apiece, down 1.83 per cent on BSE on Wednesday.