State-owned Canara Bank on Wednesday reported a standalone profit after tax of Rs 406 crore for the June quarter, helped by improvement in net interest income.
The bank amalgamated Syndicate Bank with itself effective April 1, 2020. The amalgamated entity reported a net loss of Rs 651 crore on a standalone basis in the same quarter of the previous fiscal, according to the investor presentation of the bank filed on BSE.
The pre-amalgamation standalone profit for the quarter ended June 2019 stood at Rs 329.07 crore.
"We have reduced our expenses both in terms of operating as well as interest expenses. Our interest income has been retained to the earlier level even though our rate of interest has gone down.
"Our fee-based income has shown a growth of around 10 per cent. Due to this, we got about Rs 6,096 crore of net interest income, which is an increase of 21 per cent. Our operating profit has gone up by 32 per cent," the bank's Managing Director and CEO L V Prabhakar said. Total interest income stood at Rs 18,036 crore compared to Rs 17,746 crore. Total expenses were down 2.92 per cent to Rs 16,400 crore from Rs 16,893 crore in the year-ago period.
Net interest income stood at Rs 6,096 crore compared to Rs 5,033 crore in the year-ago period.
Net interest margin (NIM) of the bank was 2.84 per cent as against 2.53 per cent earlier.
He said 22.82 per cent of borrowers have availed the RBI's moratorium. In terms of value, 22.67 per cent of the lender's total loan book is under the moratorium.
Gross non-performing loans ratio improved to 8.84 per cent from 10.28 per cent. Net NPA was at 3.95 per cent as against 5.87 per cent.
"The asset quality of the amalgamated bank is improving," Prabhakar said.
Provision coverage ratio improved to 78.95 per cent from 68.75 per cent in the same period of the previous fiscal.
Total provisions were marginally down to Rs 3,879 crore compared to Rs 3,901 crore. Provisions for NPAs dropped 18.7 per cent to Rs 3,550 crore as against Rs 4,368 crore.
Fresh slippages stood at Rs 1,422 crore, which includes Rs 640 crore worth from two accounts in the bank's overseas branches.
Cash recovery stood at Rs 1,440 crore, while it upgraded Rs 620 crore worth of loans during the reporting quarter.
The bank has a recovery target around Rs 9,000-10,000 crore for the current fiscal, he said.
It is looking at loan growth of 6-8 per cent for the second quarter.
The bank's scrip ended 1.24 per cent down at Rs 103.15 apiece on BSE.
