Canara Bank meets Street forecasts with 90.5% jump in Q4 profit; asset quality improves

Canara Bank on Monday reported a net profit of Rs 3,174.7 crore for the quarter ended March 2023, marking a jump of 90.5 per cent compared with the corresponding period a year ago. The Bengaluru-based PSU lender's net profit was in line with analysts' expectations.

Canara Bank shares only briefly recovered their intraday losses after the earnings announcement, having struggled below the flatline for much of the session. 

The lender's net interest income (NII) — the difference between interest earned and interest paid — grew 23 per cent on a year-on-year basis to Rs 8,616.8 crore, according to a regulatory filing. 

According to Zee Business research, Canara Bank's quarterly net profit was estimated at Rs 3,100 crore and NII at Rs 9,120 crore. 

Its net interest margin — a key measure of profitability for financial institutions — improved by 14 basis points to 3.07 per cent compared with the year-ago period.

Growth in the lender's domestic deposits stood at 6.5 per cent and in domestic advances at 15 per cent, according to a statement. The analysts had pegged deposit growth at 10-12 per cent and loan growth at 18-20 per cent. 

Canara Bank dividend

The Canara Bank board recommended a dividend of Rs 12 per share — a payout of 120 per cent given the face value of Rs 10 per share. Read more on Canara Bank dividend

Canara Bank dividend, and what else?

The board also announced the payment of 15 days worth of salary as performance-linked incentive to its employees.

Canara Bank asset quality 

The bank reported improvement in its asset quality, measured as the proportion of non-performing assets (NPAs)  —  or bad loans — in total loans. 

Its gross NPAs came in at 5.35 per cent of total loans for the January-March period as against 5.89 per cent for the previous quarter, according to the filing. Net bad loans shrank to 1.73 per cent from 1.96 per cent. 

The improvement in asset quality was better than analysts' expectations. 

According to the research, Canara Bank's gross NPAs were estimated at 5.6 per cent and net NPAs at 1.8 per cent.

About Canara Bank

Canara Bank has 9,706 branches, including 3,048 in rural and 1,991 in urban regions, as of March 31, 2023. The PSU bank has a network of 10,726 ATMs.  

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