Canara Bank Q2 net spurts 181% yoy at Rs1,314cr on higher insurance income and lower provisioning

Canara Bank Ltd reported 5.47% rise in total consolidated revenues in the Sep-21 quarter at Rs23,876cr

Oct 27, 2021 08:10 IST India Infoline News Service

Canara Bank
Canara Bank Ltd reported 5.47% rise in total consolidated revenues in the Sep-21 quarter at Rs23,876cr. Revenues were up 3.72% on sequential basis. In terms of segmental top line, revenues from treasury and insurance were sharply higher on a yoy basis.

Retail banking revenues fell sharply from Rs9,579cr to Rs8,455cr as asset stress was evident. However, wholesale banking revenues were sharply higher at Rs6,655cr in the quarter. Insurance revenues of its group company were up over 30% on a yoy basis.

Operating profits were up 16.27% at Rs5,380cr in the Sep-21 quarter but it was marginally down by -0.57% higher on a sequential basis due to a surge in operating expenses stemming from the merger.

In terms of EBIT contribution, treasury operations saw a sharp fall in EBIT even as wholesale banking managed to narrow its EBIT losses in the quarter as recoveries improved. The boost came from retail banking EBIT which surged more than 60% at Rs946cr. Life insurance EBIT dipped into negative on a surge in life claims.

Profit after tax (PAT) for the Sep-21 quarter was up by a whopping 182% at Rs1,314cr. Provisions for non-performing assets on a yoy basis fell sharply from Rs3,537cr to Rs2,676cr in the Sep-21 quarter. Gross NPAs in the quarter have reduced marginally at 8.44% but still remain quite high in absolute terms.

Even net NPAs are lower but the 3.21% figure does point to substantial portion of the bad assets provided for. The one concern could be the capital adequacy at 14.45%, which would entail a series of equity dilutions for Canara Bank.

Financial highlights for Sep-21 compared yoy and sequentially

Canara Bank
Rs in Crore Sep-21 Sep-20 YOY Jun-21 QOQ
Total Income ₹ 23,876 ₹ 22,638 5.47% ₹ 23,019 3.72%
Operating Profit ₹ 5,380 ₹ 4,627 16.27% ₹ 5,410 -0.57%
Net Profit ₹ 1,314 ₹ 466 181.81% ₹ 1,235 6.47%
Diluted EPS ₹ 7.66 ₹ 3.21 ₹ 7.50
Operating Margins 22.53% 20.44% 23.50%
Net Margins 5.51% 2.06% 5.36%
Gross NPA Ratio 8.44% 8.26% 8.52%
Net NPA Ratio 3.21% 3.42% 3.46%
Return on Assets (Ann.) 0.43% 0.18% 0.46%
Capital Adequacy 14.45% 12.86% 13.46%

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