Canara Bank Q2 net down 5.3 pc at on high bond yields

BANGALORE: Hit by sharp increase in bond yields, Canara Bank today reported 5.3 per cent decline in second quarter net profit at Rs 625.94 crore.

The city-headquartered public sector bank had posted a net profit of Rs 660.97 crore in the July-September quarter of 2012-13.

"Marginal lower profit year-on-year is on account of sharp increase in bond yield which has impacted the trading profit. Trading profit for the quarter was Rs 69 crore compared to Rs 444 crore for Q1, FY14," bank's Chairman and Managing Director R K Dubey told a press conference here.

Total income rose to Rs 10,427.48 crore during the second quarter, from Rs 9,203.61 crore in the corresponding period of last fiscal, up 13.3 per cent.

The net Non-Performing Assets (NPAs) rose to 2.30 per cent during the September quarter, from 2.12 per cent in the corresponding period a year ago.

Net interest income for the quarter increased to Rs 2,191 crore, a 12 per cent year-on-year growth.

The board has approved capital infusion of Rs 500 crore by the government by way of preferential allotment of equity shares.

The bank plans to open three overseas branches -- Johannesburg ( South Africa), Dubai and Frankfurt (Germany) -- in the current financial year. 11 more overseas branches are proposed to be opened by March 2015.

The bank has launched project 'Shikhar' aimed at rejuvenating it by focusing on themes such as energising branches and customer service, increasing sales from branches, growing a robust asset base and revamping the operating model.

Global management consulting firm Boston Consulting Group (India) Private Limited is assisting the bank in this tranformation journey, officials said.