Canara Bank's profits up 353 pc

Canara Bank CMD A C Mahajan

The bank’s total income  for the quarter was Rs 5,031.95 crore,  up 23 per cent from Rs 4,099.05 crore in the  previous fiscal. The jump in revenue was mainly because of a 22 per cent growth in interest income to    Rs 4,558.38 crore in the June quarter.

Though the interest expenditure was up 20 per cent to Rs 3,266.89 crore, the bank’s net interest income rose 27 per cent to Rs 1,291 crore.

The rise in net interest income is attributed mainly to business garnered from the infrastructure, retail and core sectors.  The bank’s net interest margin (NIM) improved from 2.57 per cent as at June 2008 to 2.70 per cent at June 2009, registering an increase of 13 bps. 

Another major reason for the sharp rise in the Bank’s net profit was the significant drop in provisions to Rs 336 crore in June quarter from Rs 540.91 crore in the previous year. Canara Bank’s business per employee increased to Rs 8.10 crore. Its business per branch improved to Rs 122.10 crore as at June 2009 as compared to Rs 98.70 crore as on June 2008. The Bank’s asset quality has been influenced by the ongoing economic downturn.

When asked about the Bank’s Rs 172 crore loan exposure to STCL, a company hit by a  Rs 1300 crore steel scrap import fraud, the Bank said it has made 10 per cent provision for it. Canbank’s net NPA was 1.29 per cent as on June 30, 2009 and its gross NPA was 1.74 pc.  

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