State-run Canara Bank has posted a Rs.529 crore net profit for the second quarter (July-September) of this fiscal (2015-16), registering a 16 percent decline from Rs.629 crore in the like period a year ago.
In a regulatory filing to the Bombay Stock Exchange (BSE), the city-based bank said, sequentially, however, net profit increased 10 percent from Rs.479 crore in the first quarter (April-June) of this fiscal.
"Net profit declined due to higher provisioning (Rs.1,415 crore) for sub-standard accounts and doubtful assets during the quarter under review (Q2) as against Rs.999 crore in the same period a year ago," Canara Bank chairman Rakesh Sharma told reporters here on Wednesday.
Though operating profit increased 20 percent to Rs.1,944 crore in Q2 (July-September) from Rs.1,626 crore in the same quarter a year ago, it dipped 3 percent sequentially from Rs.2,004 crore.
Total income grew marginally 4.7 percent to Rs.12,478 crore from Rs.11,915 crore a year ago and 1.8 percent from Rs.12,253 crore a quarter ago.
"Recovery of interest and principal loans from diverse sectors such as power, iron and steel, mining, aviation, textile and infrastructure was less due to stress in their accounts in a sluggish economy," Sharma said on the occasion.
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As a result, gross non-performing assets (GNPA) shot up 53 percent to Rs.14,021 crore from Rs.9,164 crore a year ago and net NPA also went up 31 percent to Rs.9,382 crore from Rs.7,171 crore a year ago.
Of the 14,021 crore GNPA, Rs.6,551 crore were sub-standard while Rs.7.470 crore were doubtful, and 15 percent of sub-standard accounts were net NPA.
Gross NPA ratio increased to 4.27 percent from 2.92 percent a year ago and net NPA ratio to 2.90 percent from 2.31 percent," Sharma added.
As a result, return on assets was 0.39 percent from 0.51 percent year ago.
Net interest margin (NIM), however, increased marginally to 2.38 percent from 2.36 percent a year ago, while it remained flat at 2.24 percent at the global level.