Canara Bank aims to improve bottom line further with balanced focus on retail, business lending

AgenciesUpdated: Sunday, June 19, 2022, 05:29 PM IST
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Recording over two-fold jump in its net profit in fiscal year ended March 2022, Canara Bank aims to improve its bottom line further with balanced focus on advances to retail, big and small businesses, coupled with greater focus on digitisation.

During 2021-22, the state-owned lender recorded a robust growth of 122 per cent in its net profit at Rs 5,678 crore, with operating profit rising by over 17 per cent to Rs 23,089 crore.

It had earned a net profit of Rs 2,558 crore in the preceding fiscal year ended March 2021.

The challenges emanating from the global macro scenario reflected on the domestic economy, leading to a slowing down of the growth momentum of the Indian economy. However, there are positive signals for aggregate demand with consumer and business confidence picking up, Canara Bank managing director and chief executive officer L V Prabhakar said in its annual report 2021-22.

He said bank credit growth is indicating signs of a gradual recovery and improvement is being observed in exports and imports.

"Going forward, credit growth is expected to gain traction in tandem with economic growth. Despite the challenges of FY22, your bank has demonstrated robust business performance with good growth in both deposits and advances," Prabhakar said in his address to the shareholders.

Canara Bank is always keen on maintaining a well-balanced asset mix, encompassing sectors such as agriculture and Micro, Small and Medium Enterprises (MSMEs) as well as keeping a focus on retail assets, including housing, education, and vehicle loans, the official said.

"Going ahead, bank aims at improving the bottom line further with balanced thrust on retail, MSME and corporate advances coupled with increased adoption of digitalisation for efficiency improvement. The bank expects improved CASA and CASA ratio in FY23 by increasing customer network and adopting aggressive strategy of setting up of government business verticals," Prabhakar said.

As per bank's strategy, the government business vertical will act as the nodal vertical for liaisoning with government departments. including focus on opening of Single Nodal Agency (SNA) & Central Nodal Agency (CNA) accounts.

In FY22, bank's CASA (Current Account Savings Account) performance increased to Rs 3,68,732 crore, up by 11.5 per cent from Rs 3,30,656 crore as on March 2021. Of this, savings deposits grew by 12.2 per cent on year to Rs 3,15,916 crore and current deposits by 7.5 per cent from a year ago to Rs 52,816 crore.

This reflected the CASA ratio of the bank improving from 34.33 per cent to 35.88 per cent. The bank has a strong deposits clientele base of about 10.51 crore. On small and medium enterprises, the bank said MSME lending is one of the thrust areas, as the sector supports employment generation, export growth and has a positive multiplier effect.

Bank's advances to MSME stood at Rs 11,9,026 crore with MSE advances of Rs 1,01,716 crore as on March 2022. In order to increase credit flow to this segment, in FY22 the bank has launched various need-based schemes and products catering to the needs of specific segments, the bank said in the report.

"The outlook for FY23 is positive with accelerated vaccination of the larger population, government focus on capex and expected pick-up in aggregate demand on further normalisation of economic activities, particularly in the second half of the year, with some moderation in growth momentum expected in the near term due to rising inflation on elevated crude oil prices and high input costs.

"However, the Bank is committed to champion in meeting all financial needs of the customers and contribute to inclusive growth of the economy," Prabhakar said.

He said bank's management is highly confident about achieving augmented growth across all business segments by leveraging the digital technology with robust capital base in financial year 2022-23 and beyond. Bank will continue its focus on asset quality and capital conservation.

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