Canara Bank Q4 profit rises 18 pc to Rs 3,757 crore

New Delhi: State-owned Canara Bank on Wednesday reported an 18 percent rise in net profit to Rs 3,757 crore during the fourth quarter ended March 2024 on the back of improvement in core income and reduction in bad loans.

The Bengaluru-based lender had earned a net profit of Rs 3,175 crore in the year-ago period.

During the quarter, the bank's total income increased to Rs 34,025 crore as against Rs 28,685 crore a year ago, Canara Bank said in a regulatory filing.

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Interest income grew to Rs 28,807 crore during the period under review from Rs 23,910 crore in the corresponding quarter a year ago.

Net interest income of the bank increased to Rs 9,580 crore as against Rs 8,617 crore in the same quarter a year ago.

For the entire FY24, the net profit of the bank rose by 37 percent to Rs 14,554 crore compared to Rs 10,604 crore in FY23.

The bank's board recommended a dividend of Rs 16.10 per equity share (i.e., 161 percent) of face value of Rs 10 each to the shareholders for 2023-24, subject to approval at the ensuing Annual General Meeting.

On the asset quality side, the bank's Gross Non-Performing Assets (NPAs) moderated to 4.23 percent of gross advances as of March 31, 2024, from 5.35 percent by the end of March 2023.

Net NPAs also came down to 1.27 percent of the advances from 1.73 percent at the end of 2024.

Sharing the outlook for asset quality, Canara Bank MD and CEO K Satyanarayana Raju said gross NPA should come down to 3.25 percent while net NPA to touch 1 percent by the end of the current fiscal that is March 2025.

As a result, provision for bad loans declined to Rs 2,280 crore over Rs 2,399 crore earmarked during the same quarter a year ago.

Provision Coverage Ratio (PCR) stood at 89.10 percent as of March 2024 as against 87.31 percent at the end of March last year.

The bank's net interest margin improved to 3.05 percent from 2.95 percent at the end of the previous fiscal.

Given the prevailing high interest rate, he said the net interest margin would be in the range of 2.95-3 percent during the current fiscal.

Capital Adequacy Ratio (CRAR) marginally declined to 16.28 percent over 16.68 percent on March 31, 2023, with a Tier 1 ratio of 11.58 percent as on March 31, 2024.

Giving a conservative estimate of credit and deposit growth for the current financial year, Raju said, advances would be expanding 11-12 percent while deposits would be 9 percent.

Asked about the impact of the RBI draft circular on provisioning for ongoing project finance, he said, "we are seeking clarifications, including the threshold limit and since this is draft guidelines so there will not be any impact on the bank".

The bank has overall exposure of Rs 1.10 lakh crore related to project finance, he added.

On the capital raising plan, Raju said the bank does not require growth capital to meet its credit and deposit expansion during the current fiscal.

"We are self-sufficient as far as capital adequacy ratio is concerned," he said.

Besides, he said, the bank plans to divest part of its stake in two of its subsidiaries - Canara HSBC Life Insurance and Canara Robeco Mutual Fund - through an initial public offering.

These are different stages of approval and one of these could happen by the end of the current fiscal, he added.

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