Canara Bank Q1 Results: PAT up 10% at Rs 3,905 crore

Lower provisions helped state-owned Canara Bank to report a 10.5% rise in net profit for the June quarter at Rs 3905 crore against Rs 3535 crore seen in the year-ago quarter.

The bank's operating profit remained flat at Rs 7616 crore against Rs 7604 crore, on account of 19% rise in expenditure outpacing the 14% expansion in total income.

The rise in expenditure was due to higher wages and higher interest outgo. Net interest income rose by a modest 6% to Rs 9166 crore.


The net interest margin for the quarter stood at Rs 2.90% against 3.05% in the year-ago period.

"It was a testing period for the entire banking industry because the cost of funds is not coming down," managing director K Satyanarayana Raju told ET. He also said that operations on ground including loan recovery got impacted due to the two-month long Parliamentary elections.

The bank's asset quality improved further with the gross non-performing assets falling to 4.14% as on June 30, from 5.15% a year back. Provisions to cover bad loans were lower in tandem, even as the provision coverage ratio rose to 89.22% from 88.04%.

Total provisions and contingencies including taxes stood 8.8% lower at Rs 3711 crore.

In terms of advances, its retail lending expanded by 23.5% to Rs 1.76 lakh crore.