Canara Bank share price was down over 3 percent intraday on July 28, a day after the bank declared its June quarter results.
The bank on July 27 reported nearly three-fold jump in standalone net profit at Rs 1,177.47 crore for the quarter ended June 30 helped by reduction in bad loans. The public sector lender had logged a net profit of Rs 406.24 crore in the same quarter of the previous financial year.
During the June quarter last year, Canara Bank had amalgamated Syndicate Bank into itself with effect from April 1, 2020.
Total income in the April-June quarter increased marginally to Rs 21,210.06 crore from Rs 20,685.91 crore in the year-ago period, Canara Bank said in a regulatory filing.
The bank's gross non-performing assets (NPAs) declined slightly at 8.50 percent of the gross advances as on June 30, 2021 as against 8.84 percent at June-end last year.
The stock was trading at Rs 143.65, down Rs 5.15, or 3.46 percent at 11:19 hours. It has touched an intraday high of Rs 150.40 and an intraday low of Rs 142.10.
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The bank's net NPA ratio, too, fell to 3.46 percent from 3.95 percent in the same quarter a year ago. As a result, provisions and contingencies for the first quarter came down to Rs 3,728.52 crore as compared to Rs 3,826.34 crore in the year-ago period.
The bank's capital adequacy ratio stood at 13.36 percent as at June 2021, out of which Tier-I is 10.34 percent and Tier-II is 3.02 percent.
The bank said it plans to raise Rs 9,000 crore through a mix of debt and equity to enhance capital base to fund its business growth during the current fiscal.
Global research firm Morgan Stanley has maintained its underweight call on the stock with target at Rs 155 per share. It is of the view that both coverage and capital ratios remain lower than its peers. Asset quality outlook is still uncertain given high slippages and restructuring, the brokerage firm said, according to a CNBC-TV18 report.
The research firm has stayed underweight despite inexpensive valuations given structural challenges and low margin of safety.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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