Canara Bank Posts A Diverse Q3FY14 Result

Public sector bank, Canara Bank, today (January 31, 2014) announced its quarterly results for three month ending December 2013. The bank has showed a bad financial performance on bottomline and asset quality front. Although the topline of the bank has improved, but the bottomline and NPAs remain subdued in the quarter.

Net interest income (NII) grew by 12% to Rs 2226.99 crore for Q3FY14 on year-on-year basis. Other income of the bank remained stable and stood at Rs 851.42 crore as compared to Rs 845.51 crore in Q3FY13. The deposits and advances of the bank grew significantly by 26% and 32% respectively on Y-o-Y basis.

Pre provisions earnings of the bank, showed a growth of Rs 74.5 crore to Rs 1590.9 crore in the third quarter in FY14.

On yearly basis, the bank has increased its provisions heavily by 68% to Rs 1051.51 crore from Rs 625.9 crore in Q3FY13. On sequential basis also, the provisions of the bank has increased by the same percentage (67.99%), which is a worry sign for the bank.

As far as asset quality of the bank is concerned, it has been deteriorated on both absolute basis and as a percentage of gross advances. On Q-o-Q basis, the absolute gross and net NPA increased by 8% and 6.4% to Rs 8073.92 crore and Rs 6869.9 crore respectively.

Further, as a percentage of gross advances, the gross and net NPA has increased by 15 basis points and 9 basis points to 2.79% and 2.39% respectively.

However, despite the higher provisioning and deteriorating asset quality on sequential basis during the third quarter in FY14, the bank management in its concall has expressed its gross NPAs as a percentage of gross advances to improve by 19 -20 basis points at 2.5-2.6% for Q4FY14.