Canara Bank Q1 profit soars 82% at Rs 1,013 cr

Robust growth CASA acted as catalyst

Canara Bank Q1 profit soars 82% at Rs 1,013 cr

Likewise, the bank also reported an increase of 17.15 per cent in its total income for the first quarter at Rs 5,894.85 crore, as against Rs 5,031.95 crore in the year-ago period. Similarly, the bank’s operating profit during the reporting quarter shot up by 61 per cent to Rs 1,483 crore in the June 2010 quarter compared to Rs 921 crore.
 
Briefing reporters, Chairman & Managing Director A C Mahajan attributed the nine-fold increase in the bank’s net profit to the over 28.8 per cent growth in its CASA (current account, savings account) deposits which touched Rs 69,350 crore.  Thanks to the phenomenal growth in the bank’s CASA deposits which attract very low interest rate, the net interest income of the bank did have a healthy turn. This, in turn, he said led to the bank’s net interest income also recording a handsome 33.8 per cent growth from Rs 1,291 crore in June 2009 quarter to Rs 1,728 crore in the current quarter.  This, he added, resulted in the bank’s net interest margin too clocking a significant increase of 31 basis points.     
   
The Bank’s good show in the quarter was also due to the non-interest income notching up a strong 55 per cent growth to touch Rs 734 crore as against Rs 474 crore a year ago. Furthermore, Mahajan said, thanks to good cash recovery and strengthening of credit monitoring both the gross NPA and net NPA in absolute and percertage terms also came down.

Gross NPA
While gross NPA came dorn to 1.46 per cent at Rs 2,549 crore, the net NPA ratio dropped to 1 per cent at Rs 1,729 crore as at June 30, 2010. Cash recovery, Mahajan said, increased from Rs 245 crore a year ago to Rs 401 crore.  The bank’s revenue from treasury segment during the three months ended June 30 rose 40.35 per cent to Rs 1,565.49 crore. It had reported a revenue of Rs 1,115.39 crore from the segment in the first quarter of 2009-10. But the bank’s retail banking operations in the June quarter saw a dip of 11per cent at Rs 1,496.20 crore, from Rs 1,681.58 crore in the year-ago period. With the bank’s aggregate business seeing a 24.5 per cent CAGR and year on year growth of 23.4 per cent at Rs 4,12,649 crore, the bank expects to reach an aggregate business of Rs 5 lakh crore in fiscal 2010-11.

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