Public sector lender Canara Bank 's first quarter (April-June) net profit grew 1.9 percent, lower than expected, to Rs 807 crore on account of lower other income during the quarter despite fall in provisions. Its asset quality performance weakened on sequential basis.According to CNBC-TV18 poll estimates, analysts had expected the bank to report net profit of Rs 871 crore and net interest income of Rs 2,491 crore for the quarter. Net interest income, the difference between interest earned and interest expended, grew 22 percent to Rs 2,429 crore during June quarter compared to Rs 1,991 crore in same quarter last year.
Other income (non-interest income) fell 17 percent on yearly basis to Rs 1,026.9 crore in the quarter gone by. Provisions dropped 27.8 percent quarter-on-quarter (down 14 percent year-on-year) to Rs 788 crore with the provision coverage ratio at 60.10 percent as on June 2014. Operating expenses increased to Rs 1,661.16 crore from Rs 1,331.14 crore Y-o-Y. Asset quality worsened further with the gross non-performing assets (NPA) rising by 18 basis points sequentially (down 24 basis points Y-o-Y) to 2.67 percent and net NPAs increasing by 5 bps Q-o-Q (down 45 bps Y-o-Y) to 2.03 percent in the quarter gone by. In absolute term, gross NPA shot up 7.8 percent Q-o-Q and 11.3 percent Y-o-Y to Rs 8,159 crore and net NPA rose 3.1 percent sequentially (down 1 percent Y-o-Y) to Rs 6,150 crore during the quarter.
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