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Canara Bank profit dips

The operating profit fell 20% to Rs 1,282 cr as against Rs 1,600 cr in the year-ago period

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BS Reporter Bangalore
Last Updated : Jan 21 2013 | 5:46 PM IST

Canara Bank has reported a 22.4 per cent drop in net profit at Rs 661 crore for the second quarter, compared with Rs 852 crore reported in the corresponding quarter last financial year. The total income was up nine per cent to Rs 9,204 crore as against Rs 8,437 crore in the same period last year.

The operating profit fell 20 per cent to Rs 1,282 crore as against Rs 1,600 crore in the year-ago period. The net interest income was almost flat at Rs 1,957 against Rs 1,962 in the year-ago period. The net interest margin dipped to 2.35 per cent from 2.51 per cent of the last financial year.

The non-interest income was down 26 per cent to Rs 608 crore against Rs 823 crore a year ago.

“Our net profit was impacted on account of higher interest outgo for bulk deposits, slower credit offtake, fresh slippages and restructuring of large corporate accounts. We have restructured accounts involving an amount of Rs 600 crore,” said Archana Bhargava, executive director.

Bhargava said the bank reduced its bulk deposits to the tune of Rs 20,000 crore and the bank hoped to meet the government expectations by the end of March 2013. The bank still has Rs 60,000 crore in bulk deposits.

The bank made a provision of Rs 421 crore towards bad loans, 23 per cent lower than the corresponding quarter of the last financial year.

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The return on assets declined to 0.71 per cent in against 1.01 per cent in the year-ago period. The capital adequacy ratio under Basel-II declined to 13.07 per cent from 12.78 per cent in the year-ago period. “Adequate headroom is available under both tier-I and tier-II options to raise capital to support business growth momentum,” Bhargava added.

The net non-performing assets ratio stood at 2.12 per cent (Rs 4,569 crore) compared with 1.42 per cent (Rs 3,100 crore) a year ago.

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First Published: Nov 07 2012 | 12:06 AM IST

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