Canara Bank Q1 net up 71.8% YoY to Rs 2,022 cr on higher interest income

Sequentially, its net profit rose 21.4%; lender's treasury income rises despite hardening yields

Canara Bank’s net profit grew by 71.8 per cent year on year (YoY) to Rs 2,022 crore in the quarter ended June (Q1FY23) on the back of a rise in its net interest income (NII) and other income.

The Bengaluru-based public sector lender had posted a net profit of Rs 1,177 crore during the same period last year (Q1FY22). Sequentially, its net profit rose 21.4 per cent from Rs 1,666 crore in Q4FY22.

The bank’s stock was trading 1.4 per cent lower at Rs 225.8 per share on BSE on Monday.

Its net interest income (NII) was up 10.15 per cent in Q1FY23 to Rs 6,785 crore from Rs 6,160 crore in Q1FY22. However, it was down 3.14 per cent sequentially, from Rs 7,005 crore in the March 2022 quarter. Its NIM improved to 2.78 per cent in Q1FY23 from 2.71 per cent a year ago. However, it fell from 2.82 per cent in March 2022.

The bank said in a filing with the BSE that its NIM was expected to be about 3.0 per cent in the current financial year.

Its non-interest income rose 24.55 per cent YoY to Rs 5,175 crore in Q1FY23, from Rs 4,155 crore in Q1FY22. It also rose sequentially from Rs 4,462 crore in Q4FY22.

Despite hardening of bond yields, the treasury income, which is part of other income, rose by 46.17 per cent YoY to Rs 1,849 crore in Q1Fy23 from Rs 1,265 crore in Q1Fy22. Sequentially, the treasury income was up 32.64 per cent from Rs 1,394 crore in March 2022.

The bank’s asset quality profile improved with gross non-performing assets (GNPAs) at 6.98 per cent till June 2022 from 8.5 per cent in the year-ago quarter. Net NPAs dipped to 2.48 per cent from 3.46 per cent a year ago.

NPA provisions rose to Rs 2,673 crore in Q1FY23 from Rs 2,334 crore in Q1FY22. The provision coverage ratio rose to 84.51 per cent for the quarter under review from 81.18 per cent a year ago.

The bank’s loan book grew 14.47 per cent YoY, on par with the rate at which the banking system’s loan book expanded (14.4 per cent YoY) in June 2022. The outstanding advances stood at Rs 7.83 trillion as of June 2022.

The deposits grew by 9.42 per cent YoY to Rs 11.18 trillion in June 2022. The credit-to-deposit ratio was 70.09 per cent at the end of June 2022 up from 67 per cent a year ago.

The bank’s total capital adequacy ratio (CAR) stood at 14.91 per cent in June 2022, up from 13.36 per cent in June 2021.