Canara Bank Q3 net profit soars 50% to Rs 1052.58 crores

Bangalore, January 28, 2010:

Performance Highlights for the Third Quarter ended December 2009 Canara Bank’s Net Profit crossed Rs.1000 Cr in Q3 FY10

Net profit of the Bank recorded an impressive growth of 50% to Rs.1053 crore for the Q3FY10 compared to Rs.702 crore a year ago. This is despite unfavourable environmental conditions of low credit growth and hardening of bond yield. The Bank could maintain the spread by increasingly focusing on core business growth and containing cost.

Operating Profit of the Bank rose to Rs.1470 crore, up by 21% over Q3FY09. A total provision of Rs.417 crore has been made during the quarter.

The Bank accorded top priority to contain NPAs and has built up adequate provisioning level. Provision Coverage Ratio at 74.04%, is well above the RBI stipulated norm of 70% (to be achieved by September 2010).

Return on Average Assets for the Q3 improved to 1.85% compared to 1.45% for the same quarter a year ago. While Earnings Per Share (EPS) (not annualized) for Q3 improved to Rs.25.67 from Rs.17.11 a year ago, Book Value rose to Rs.305.75 compared to Rs. 236.33 as at December 2008.

Income and Expenses

Total income of the Bank for Q3 rose to Rs.5469 crore, including Rs.3471 crore contributed by interest income from loans/advances. Non-interest income of the Bank increased to Rs.781 crore.

Total expenses of the Bank declined by 4.1% to Rs.3999 crore. Continuing with the austerity measures, the Bank’s operating expenses remained almost at the December 2008 level.

Net interest income for the Q3 recorded a 18.8% growth to reach Rs.1478 crore compared to Rs.1244 crore during the same quarter a year ago.

Nine Months Performance

For the nine months ended December 2009, net profit moved up to Rs.2518 crore, recording a significant 86% y-o-y growth. Operating profit grew by 46% to reach Rs.3930 crore.

The Bank’s total income increased by 15.6% during the first nine months to reach Rs.16103 crore, with a 12.6% growth contributed by interest income from loans/advances. The non-interest income of the Bank grew by 46.6% to touch Rs.2148 crore. Fee-based income grew by 22% to Rs.998 crore.

The growth in operating expenses for the nine months period was contained at 5.2%.

Net interest income for the nine months period rose to Rs.4083 crore from Rs. 3412 crore a year ago, recording growth of 19.7%.

Net Interest Margin (NIM) at 2.71% improved sequentially from 2.66% as at September 2009.

Business Growth and Productivity

Aggregate Business mix reached Rs. 3,56,310 crore recording a y-o-y growth of 17.3% over the December 2008 level of Rs. 3,03,759 crore. While aggregate deposits of the Bank reached Rs.2,08,899 crore with a growth of 19.5%, net advances rose to Rs.1,47,411 crore recording a 14.3% growth. The Bank's core deposits grew y.o.y by 46.9%, supported by 70% growth in retail term deposits and 15% growth in savings deposits. The Share of CASA deposits in domestic deposits stood at 29.5%. Credit to deposit ratio remained at 70.57%. High cost bulk deposits of the Bank saw a significant reduction over Rs.37000 crore, coming down sharply to around Rs.3000 crore.

The Bank has been giving thrust to mobilize higher savings deposits under its nationwide ‘Savings Utsav’ campaign. Between August 2009 and December 2009, the Bank has mobilized 9.27 lakhs new SB accounts. Savings Utsav will continue till March 2010.

The Bank’s domestic business constituted 96.7% of the aggregate business with Rs.202899 crore (97.1%) under deposits and Rs. 141651 crore (96.1%) under advances.

Productivity, measured as Business per Employee, rose to Rs.8.58 crore as at December 2009, compared to Rs.7.22 crore a year before. Business per Branch moved up to Rs.118.57 crore as against Rs.111.43 crore at December 2008. The Bank has added 1.6 million clientele during the nine months period, taking the total clientele base to 36.40 million.

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(This is a press release from Canara Bank)