 "Canara Bank Q4 result: Net profit increases by 18% to Rs 3,557 cr")
Public sector lender Canara Bank’s net profit rose by 18.33 per cent year-on-year (Y-o-Y) to Rs 3,757 crore for the January-March quarter (Q4) of 2023-24 on the back of a steady rise in interest income and a decline in provisions.
Sequentially, the Bengaluru-based lender’s profit rose by 2.76 per cent from Rs 3,656 crore in the quarter ended December (Q3) of the financial year (FY) 2024.
For FY25, Canara Bank’s net profit rose 37.25 per cent to Rs 14,554 crore from Rs 10,604 crore for FY23.
The board has recommended a 161 per cent dividend for FY24, subject to shareholder approval. It paid a 120 per cent dividend for FY23.
Canara Bank stocks closed 3.25 per cent lower at Rs 558.1 per share on the Bombay Stock Exchange (BSE) on Wednesday. The results came out during market hours on Wednesday.
Canara Bank’s capital adequacy ratio (CAR) stood at 16.28 per cent, with common equity Tier-1 (CET1) at 11.58 per cent as of the end of March 2024.
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The bank’s net interest income (NII) expanded by 11.18 per cent to Rs 9,580 crore in Q4 of FY24, compared to Rs 8,617 crore in Q4FY23. Sequentially, NII rose by 1.73 per cent over Q3 of FY24. Its net interest margin (NIM) improved to 3.05 per cent in Q4FY24 from 2.95 per cent in Q4FY23. Sequentially, NIM was also up from 3.02 per cent in Q3 of FY24.
In a post-results media interaction, K Satyanarayana Raju, managing director and chief executive officer (MD & CEO), said that the interest margins improved despite tough competition for raising deposits. While the cost of deposits rose from 4.38 per cent in Q4FY23 to 5.5 per cent in Q4FY24, the yield on advances improved from 7.70 per cent in March 2023 to 8.71 per cent in March 2024.
The non-interest income comprising fees, commissions, treasury earnings, etc., expanded by 9.23 per cent to Rs 5,217 crore in Q4FY24 from Rs 4,776 crore in Q4FY23.
The lender’s provisions and contingencies declined to Rs 3,094 crore in Q4, as against Rs 2,481 crore in the year-ago period.
Advances grew 11.34 per cent Y-o-Y to Rs 9.6 trillion at the end of March 2024. The retail, agriculture, and MSME (micro, small, and medium enterprises) segments rose by 13.52 per cent Y-o-Y to Rs 5.41 trillion in March 2024.
Asked about the draft norms on project finance, which propose higher provisions, Raju said the bank does not see much pressure on capital and margins as it will be able to pass on any increase to customers. These are draft norms, and banks will seek clarity from the regulator.
Total deposits increased 11.29 per cent Y-o-Y to Rs 13.12 trillion. The bank expects 10 per cent growth in advances and 9 per cent growth in deposits in FY25, he said.
Canara Bank’s gross non-performing asset (GNPA) ratio declined to 4.23 per cent in Q4 from 5.35 per cent a year ago and 4.39 per cent in December 2023. The net NPA ratio declined to 1.27 per cent in March 2024 from 1.73 per cent in Q4FY23 and 1.32 per cent in the previous quarter.
The provision coverage ratio stood at 89.1 per cent in March 2024 compared to 87.31 per cent a year ago.