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Canara Bank Q2 profit jumps 89% to Rs 2,525 cr, asset quality improves

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reported on Thursday an 89 per cent jump in net profit to Rs 2,525 crore in July-September (Q2 FY23), aided by higher net interest income that came on the back of a healthy growth in advances.

In the year-ago period, the state-owned lender had reported a net profit of Rs 1,333 crore. The Bengaluru-based bank said it has shifted to a new tax regime resulting in a deferred tax reduction of Rs 2,451 crore.

The bank’s net interest income grew by 18.5 per cent year-on-year (YoY) to Rs 7,434 crore compared to Rs 6,273 crore. Non-interest income grew 13 per cent YoY to Rs 4,825 crore in the same period. Net interest margin (NIM), a measure of profitability, of the bank stood at 2.86 per cent compared to 2.78 per cent in the previous quarter and 2.77 per cent in the year-ago quarter.

Provisions and contingencies increased 8 per cent YoY and declined marginally sequentially to Rs 3,636.81 crore. The provision coverage ratio improved to 85.36 per cent in Q2FY23.

The bank’s asset quality saw sharp improvement as gross non-performing assets (GNPAs) dropped 205 basis points (bps) on a YoY basis and 61 bps sequentially to 6.37 per cent at the end of September quarter. Net NPAs dropped 102 bps YoY and 29 bps sequentially to 2.19 per cent. The slippage ratio also improved to 0.35 per cent at the end of September quarter from 1.04 in the year-ago period.

The bank’s gross global advances grew by 20 per cent YoY to Rs 8.24 trillion while domestic advances reported a 17.66 per cent YoY growth to Rs 7.80 trillion. The portfolio increased by 12. 5 per cent YoY and housing portfolio increased by 17 per cent YoY.

Global deposits grew by 9.82 per cent YoY to Rs 11.33 trillion while domestic deposits grew by 7.77 per cent YoY to Rs 10.5 trillion.

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