Canara Bank slips over 6% as net loss widens to Rs 3,529 crore in Q4

The bank's net interest income (NII) for reporting quarter declined by 9.35 per cent to Rs 3,319 crore

Shares of Canara Bank declined as much as 6.76 per cent to Rs 102.05 on the BSE after the public sector bank's standalone net loss widened to Rs 3,259.3 crore in the March quarter of FY20 (Q4FY20) from net loss of Rs 551.5 crore in Q4FY19.

The bank's pre-tax loss came in at Rs 3,334.5 crore for the fourth quarter on a decline in net interest income and higher employee costs. However, income on a standalone basis during the quarter rose to Rs 14,222.39 crore, compared with Rs 14,000.43 crore in the year-ago period, Canara Bank said in a regulatory filing.

Its net interest income (NII) for the reporting quarter declined by 9.35 per cent to Rs 3,319 crore in Q4FY20. The other income consisting of fees, commission etc was up 18.83 per cent at Rs 2,175 crore in Q4FY20.

"Employee costs rose to Rs 2,175.2 crore in Q4FY20 from Rs 1,146.9 crore a year ago. Provisions (including for NPAs) and contingencies stood at Rs 5,375.3 crore in Q4FY20 down from Rs 5,523.5 crore in Q4FY19. The provision coverage ratio (PCR) of bank improved to 75.86 per cent at end of March 2020, up from 66.13 per cent in March 2019. Bank expects to improve PCR by 2-3 per cent in FY21," said managing director and chief executive L V Prabhakar.

Referring to the impact of Covid-19 on operations, the bank said it has made provision of Rs 94.1 crore for loans worth Rs 1,883.4 crore to whom regulatory asset qualification benefit has been extended.

Gross non-performing Assets (GNPAs) declined to 8.21 per cent in Q4FY20 from 8.83 per cent in Q4FY19. Gross NPAs were at 8.36 per cent at end of December 2019 (Q3FY20).

The net NPAs stood at 4.22 per cent in March 2020 down from 5.37 per cent in March 2019. The net NPAs were at 5.05 per cent in December 2019.

For FY20, the Bengaluru-based bank booked net loss of Rs 2,235.7 crore as against net profit of Rs 347 crore for FY19. These figures pertain to the bank’s standalone performance and do not include those of Syndicate Bank which merged with Bank on April 1, 2020.
 

Its deposits rose by 4.4 per cent to Rs 6,25,351 crore in FY20. Bank has guided for growth of 10 per cent in deposits during Fy21. Its advances grew by 1.58 per cent to Rs 4,51,223 crore in March 2020. It is targeting 7-8 per cent growth in loans in Fy21 based on disbursals worth Rs 91,000 crore made in the current quarter (Ending June 2020).

The Capital Adequacy Ratio (CAR) stood at 13.72 per cent as on March 31, 2020 with Tier-I at 10.21 per cent.

Moreover, the bank's board will meet next month to consider proposal to raise Rs 6,000-8,000 crore in capital. It may visit capital market in second half of current financial year to raise equity or tier I bonds, Prabhakar said.

At 10:03, the stock was trading 5.76 per cent lower at Rs 103.15 in comparison to 0.3 per cent decline in Sensex. around 1.35 crore shares have echanged hands on the NSE and BSE so far.