Canara Bank Reports Robust Q3 FY24 Profits Of Rs 3,656 Cr, Highlights Strong Financial Metrics & Sectoral Growth

The profit for Canara Bank for the quarter ending December 2023 (Q3 FY24) has reached Rs 3,656 crore, compared to the net profit of Rs 2,882 crore for December 2022 (Q3 FY23), as reported by the Central Board of Direct Taxes. 

The net interest income has stood at Rs 9,417 crore, reflecting a 9.50 per cent year-on-year (YoY) growth. Similarly, the net interest margin stood at 3.02 per cent, showing a marginal improvement by nine basis points (bps).

The gross non-performing assets (GNPA) ratio has reached 4.39 per cent, indicating a decline of 150 bps on a YoY basis. The net NPA ratio has stood at 1.32 per cent, declining by 64 bps YoY.

On the positive side, the provision coverage ratio (PCR) stands at 89.01 per cent, improving by 269 bps on a YoY basis and approaching the targeted 90 per cent PCR.

The capital risk adequacy ratio (CRAR) stands at 15.78 per cent as of December 2023, out of which common equity tier 1 capital (CET1) is 11.28 per cent. Return on assets has improved to 1.01 per cent for Q3 FY24, compared to 0.76 per cent for Q3 FY23. Return on Equity has also improved to 21.95 per cent for Q3 FY24, up from 18.38 per cent for Q3 FY23.

Retail, agriculture, and micro small and medium enterprises (MSMEs) credit has grown by 14.56 per cent to Rs 5,30,444 crore, compared to Rs 4,63,038 crore for December 2022. Retail credit has grown by 12.14 per cent, with housing loan growth at 12.07 per cent.

The domestic deposit of the Bank has reached Rs 11,66,848 crore as of December 2023, with a growth of 8.07 per cent (YoY), whereas domestic advances (gross) of the bank have reached Rs 9,01,465 crore as of December 2023, growing by 12.56 per cent (YoY).

K Satyanarayna Raju, Managing Director (MD) and Chief Executive Officer (CEO), said in the press conference, “The retail lending portfolio for Canara Bank has increased to Rs 1,53,640 crore, which is a growth of 12.14 per cent (YoY). The housing loan portfolio has increased by 12.07 per cent (YoY) to Rs 91,800 crore. Also, advances to agriculture and allied activities have grown by 19.26 per cent (YoY) to Rs 2,42,470 crore as of December 2023. The bank has achieved targets in the priority sector at 45.91 per cent and agricultural credit at 21.77 per cent of adjusted net bank credit (ANBC) as of December 2023, as against the norm of 40 per cent and 18 per cent, respectively.”

Regarding slippages, which denote the fresh amount of loans that have turned bad in a year, Raju stated, “In the current quarter, the slippage is around Rs 3,000 crore; next quarter, we are expecting that the slippage will come down to around Rs 2,800 crore. Our recoveries will be more than slippages. Our recoveries and upgradation will be around Rs 3,500 crore.”

Raju also mentioned that in the previous quarter, the technical write-off was above Rs 3,900 crore, but it is a technical write-off. Similarly, from Rs 2,697 slippages, Rs 1,200 crore is from micro small and medium enterprises (MSMEs), Rs 1,000 is from agriculture, and Rs 400 crore from retail.

Debashish Mukherjee, Executive Director, Canara Bank, said, “The bond yields are going up. So that is causing a lot of problems with regard to booking treasury profits. That was one of the reasons, but then we tried to compensate for it with our interest income. So far as the treasury is concerned, overall, there is a downslide. Until the yields come down, we cannot book a profit, and that is applicable to everybody else. So, our treasury portfolio yield is pretty high at 6.90, which is comfortable, but because of this yield movement and adverse yield movements, it is becoming difficult for us to book profits right now on treasuries.”