State-run Canara Bank on Tuesday reported a three-fold jump in its standalone profit-after-tax at Rs 1,333 crore in the quarter ended September, aided by lower bad loan provisioning and rise in non-interest income and operating profit.
The lender had reported a profit-after-tax of Rs 444 crore in the year-ago quarter.
"There was no pressure on provisioning as we aggressively made provisions wherever it was required. Non-interest income is growing very significantly. Our operating profit has grown by more than 20 percent," the bank's managing director and CEO L V Prabhakar said while explaining the rise in profit.
Non-interest income grew by 38 percent to Rs 4,268 crore from Rs 3,103 crore in the corresponding quarter of the previous fiscal. Fee-based income increased by 20 percent to Rs 1,463 crore from Rs 1,219 crore in the same quarter of fiscal 2021.
Operating profit jumped by 22 percent to Rs 5,604 crore from Rs 4,597 crore.
Net interest income declined by 0.51 percent to Rs 6,273 crore in Q2 FY2022 from Rs 6,305 crore in the same period of the previous fiscal. Net interest margins (NIM) stood at 2.72 percent from 2.82 percent.
Total provision grew by 2.85 percent to Rs 4,271 crore as against Rs 4,153 crore. The bank's provisions for NPA declined by 24.2 percent to Rs 2,678 crore in the reporting period from Rs 3,533 crore in the year-ago quarter.
Gross non-performing assets (GNPA) ratio increased to 8.42 percent from 8.23 percent in September quarter of fiscal 2021. Net NPA stood at 3.21 percent against 3.42 percent.
The lender is expecting gross NPA to be at 7.5 percent and net NPA at 2.8 percent during FY2022.
Provision coverage ratio (PCR) stood at 82.44 percent as of September 2021 against 81.48 percent last year.
Fresh slippage in the quarter stood at Rs 6,525 crore. Prabhakar said of the fresh slippage, Rs 3,200 crore has come from two Srei Group companies - Srei Infrastructure Finance and Srei Equipment Finance.
The bank has classified exposure to these two Srei Group companies as NPAs and made 50 percent provisioning as against the regulatory requirement 15 percent, he added.
Cash recovery stood at Rs 3,002 crore and upgradation at Rs 2,671 crore. The bank recovered Rs 1,700 crore from Dewan Housing Finance Ltd (DHFL's) resolution.
Capital to Risk (Weighted) Assets Ratio (CRAR) stood at 14.37 percent as at September 2021. Out of which tier-I is 11.41 percent and tier-II is 2.96 percent.
The lender plans to raise Rs 4,000 crore of AT1 bonds and Rs 2,500 crore of tier II bonds in fiscal 2022. Prabhakar said the money will be raised at an appropriate time when the coupons are attractive.
Domestic deposits grew by 7.61 percent to Rs 9,80,337 crore and advances by 5.71 percent to Rs 662,991 crore as of September 2021.
Prabhakar expects credit growth to be at 7.5 percent and retail loan growth to be more than 10 percent in this fiscal.
In the corporate loan book, the lender has a pipeline of Rs 20,000 crore, he said.
The bank's scrip closed at Rs 193.40 apiece, down 4.23 percent on BSE.