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Canara Bank Q2 profit flat at Rs 626.8 cr, provisions spike

Net interest income, the difference between interest earned and interest expended, grew by 8 percent to Rs 2,367.8 crore in the quarter ended September 2014 compared to Rs 2,191.2 crore in corresponding quarter of last fiscal.

Canara Bank Q2 profit flat at Rs 626.8 cr, provisions spike

The News International Team

Public sector lender Canara Bank ‘s net profit increased 0.14 percent to Rs 626.8 crore in July-September quarter from Rs 625.9 crore in the year-ago period, supported by solid jump in other income but was impacted by higher provisions.

Net interest income, the difference between interest earned and interest expended, grew by 8 percent to Rs 2,367.8 crore in the quarter ended September 2014 compared to Rs 2,191.2 crore in corresponding quarter of last fiscal.

Other income (non-interest income) jumped 32.1 percent to Rs 1,021.34 crore from Rs 773 crore crore during the same period while operating expenses surged 14.6 percent year-on-year to Rs 1,763.6 crore in the quarter gone by.

Provisions and contingencies shot up 20.7 percent on yearly basis (up 3.2 percent sequentially) to Rs 813.7 crore during the quarter with the provision coverage ratio at 58.68 percent as on September 30.

Asset quality weakened on sequential basis. Gross non-performing assets (NPA) increased 28 basis points Y-o-Y (up 25 bps Q-o-Q) to 2.92 percent while net NPA rose 1 bp year-on-year (up 28 bps quarter-on-quarter) to 2.31 percent in the second quarter of current financial year 2014-15.

In absolute term, gross NPA in September quarter was Rs 9,164.3 crore, up 22.6 percent compared to same quarter last year and up 12.3 percent compared to previous quarter. Net NPA jumped 11 percent on yearly basis (up 16.6 percent sequentially) to Rs 7,170.3 crore during the same period.

Capital adequacy ratio (as per Basel III norms) declined to 10.19 percent in Q2FY15 compared to 10.23 percent in Q1FY15 and 10.62 percent in Q2FY14.

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