Canara Bank reports 5 percent net profit growth during Q3

 | January 31,2011 06:36 pm IST

Leading state-run Canara Bank Monday reported net profit of Rs.1,106 crore for the third quarter of the current fiscal (2010-11), registering a marginal five percent increase year-on-year (YoY) over Rs.

1,053 crore posted last year.


"The marginal growth in net profit for the quarter under review (October-December) is due to extraordinary provisions to the tune of Rs.550 crore as against the net profit of Rs.1,053 crore in like period last fiscal," Canara Bank chairman and managing director S. Raman told reporters here.


The provisions include one-time profit of Rs.250 crore on sale of investment and reversal of depreciation on investment of Rs.300 crore in the same period of last fiscal.


"Barring these extraordinary provisions, net profit growth would have been a record 120 percent higher for the quarter," Raman said.


Similarly, operating margin grew 10 percent to Rs.1,513 crore from Rs.1,380 crore for the quarter (Q3), while provision for standard assets and non-performing assets shot up a whopping 103 percent to Rs.157 crore from Rs.77 crore year ago.


Net interest income grew 43 percent to Rs.2,119 crore from Rs.1,478 crore due to 26 percent growth in total interest income to Rs.5,908 crore from Rs.4,688 crore year ago while growth in interest expenses was limited to 18 percent.


"Net interest margin increased 50 basis points to 3.21 percent from 2.71 percent year ago for the quarter and we hope to maintain it above three percent for the entire fiscal," Raman pointed out.


The bank's total business rose 27 percent to Rs.453,379 crore (Rs.4.5 trillion), with total deposits up 25 percent to Rs.263,497 crore (Rs.2.6 trillion) and net advances up 29 percent to Rs.189,882 crore (Rs.1.9 trillion).


"We have set a total business target for the fiscal is Rs.500,000 crore (Rs.5 trillion) for the entire fiscal, comprising Rs.285,000 crore (Rs.2.85 trillion) in total deposits and Rs.215,000 crore (Rs.2.15 trillion) in advances," Raman noted.


In view of consistent net profit growth over the last few quarters, the bank's capital adequacy ratio (CAR) stood at 13.02 percent, with tier-1 capital at 8.27 percent.


"The bank has raised Rs.750 crore under innovative perpetual debt instrument and Rs.1,000 crore under upper tier-2 bonds during the first nine months of this fiscal. We have enough headroom to raise capital to for business growth," the chairman added.