Canara Bank net plummets 87%

Canara Bank net plummets 87%

Canara Bank net plummets 87%

Public sector lender Canara Bank on Friday reported a whopping 87 per cent drop in net profit at Rs 84.97 crore for the third quarter ended December 31, 2015, on account of rise in bad loans.

The bank had reported net profit of Rs 655.97 crore in the corresponding quarter last year. Provisions rose on account of an intense asset quality review (AQR) conducted by the Reserve Bank of India (RBI) in the October-December quarter, wherein the regulator asked banks to consider providing for many stressed assets which were classified as standard.

Canara Bank MD and CEO Rakesh Sharma said, “In terms of profit, there is a reduction compared with last year. It was mainly because, as per AQR we have been able to identify those NPAs so that we can take all corrective steps.”

Sharma said, “Once having identified those NPAs, we will be taking steps and now we will be strengthening our recovery part also.”

The bank’s total income also fell to Rs 12,050.6 crore for the quarter under review from Rs 12,227.86 crore in the year-ago period, Canara Bank said in a regulatory filing to exchanges.

The gross NPAs as a percentage of total advances rose to 5.84 per cent from 3.35 per cent in the same quarter a year ago. Its net NPAs went up to 3.90 per cent from 2.42 per cent at the end of December 2014. Gross NPAs in absolute terms rose significantly to Rs 19,813.44 crore, as compared with Rs 10,573.57 crore at the end of December 2014.

However, total provisions, excluding for income tax, made during the third quarter were Rs 1,428.85 crore as against Rs 8,41.33 crore in the year-ago period.

Operating profit declined by 13.62 per cent to Rs 1,552.44 crore as against Rs 1,797.30 crore in the corresponding period.