Canara Bank Q4 Results: Stock falls after slippages rise; Lower other income impacts profit

Canara Bank Q4 Results: Stock falls after slippages rise; Lower other income impacts profit


Shares of state-run lender Canara Bank Ltd. are off the highs of the day after the lender reported its March quarter results on Monday, May 11, which saw a drop in the lender’s profitability from the same quarter last year.

Canara Bank’s net profit declined by 9.9% from the same quarter last year to ₹4,505 crore from ₹5,002 crore earlier. The drop in profit is despite a decline in provisions for the March quarter. Provisions for the March quarter fell to ₹992 crore from ₹2,414 crore during the December quarter.

Why Are Profits Down?

Canara Bank‘s profits are down due to a substantial decline in its other income. Profits are also down despite lower tax expenses.

Other income for the lender at the end of the March quarter stood at ₹4,824 crore from ₹6,350 crore during the same quarter last year.
Net Interest Income (NII) or core income earned by the lender saw growth of 4% on a year-on-year basis to ₹9,809 crore from ₹9,442 crore earlier.

Net Interest Margins for the quarter stood at 2.54% from 2.73% last year and 2.45% sequentially.

Asset Quality Picture

Canara Bank‘s asset quality remained stable on a sequential basis. Gross NPA at the end of March stood at 1.84% from 2.08% during the December quarter, while Net NPAs stood at 0.43% from 0.45% sequentially.

In absolute terms, Gross NPAs have declined by over ₹2,000 crore to ₹22,740 crore from ₹24,832 crore in December, while its Net NPAs were relatively unchanged at ₹5,209 crore from ₹5,322 crore last quarter.

Slippages for the period have increased to over ₹2,800 crore from just over ₹1,900 crore during the December quarter. Slippages Ratio stood at 0.24% at the end of the quarter from 0.16% previously.

Shares of Canara Bank are now off the highs of the day, now trading 3.9% lower at ₹129.1. The stock is down 15% so far this year.



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