Canara Bank Q2 profit up 15% to Rs 300 crore

BENGALURU: Canara Bank reported second-quarter profit of Rs 299.5 crore, up 15% from last year, after the city-based bank saw strong performance from its retail loan portfolio, which includes agriculture, home and SME loans.
The bank also aims to raise capital of Rs 7,000 crore through SIP or rights issue or other means, said Canara Bank executive director M V Rao.Of this, Rs 1,000 crore would be by way of employee ESOPs.
For the second-quarter, the public sector bank saw its interest earned from loan advances go up 11% to Rs 11,124 crore. Despite a tepid market and low 10-year bond yields, Canara Bank's income on investment grew 5% to Rs 2,720 crore. The bank also saw non-interest income -- which includes the commissions made from sale of third-party products like insurance, MFs -- increased 13%. This contributed to total income growing 6% to Rs 12,679.06 crore.
Among its different portfolio, the bank saw highest growth in vehicle loans (32%), followed by home loans (20%), MSME loans (14%), agriculture (12%) and education loans (7%). The share of retail loans in total credit portfolio, including corporate loan book, improved to nearly 60% from 59%.
Interest expended by the bank on its deposits grew 8% to Rs 7,842 crore. Including employee costs and other expenses, the bank's total expenditure went up 9% to Rs 10,352 crore.
Canara Bank saw operating profit dip 6% year-over-year to Rs 2,327 crore. But a positive tax credit of Rs 807 crore, saw its net profit up in the second-quarter to Rs 299.54 crore.
Net interest margin -- the difference between what the bank makes from its loans and spends on its deposits -- improved to 2.53% from 2.34% last year.
However, the bank had to set aside more money to cover its bad loans with provisions against contingencies going up 31% to Rs 2,835 crore.
When it came to asset quality, there was a slight dip. Gross non-performing loans (NPAs) as a percentage of assets marginally worsened to 10.56% from 10.51%. Net NPAs, however, came down to 6.54% from 7.02%.