Canara Bank, on Tuesday, reported a net profit of Rs 1,332.6 crore for the quarter ended September 30. The state-run lender had posted a net profit of Rs 444.4 crore for the corresponding period a year ago. The bank's net interest income - the difference between interest earned and interest expended - declined 0.5 percent on a year-on-year basis to Rs 6,273.8 crore. The lender's gross non-performing assets reduced to 8.4 percent in the September quarter, from 8.5 percent in the previous three months. Net bad loans stood at 3.2 percent in Q2, as against 3.5 percent in Q1. Canara Bank, however, disappointed the Street with its loan growth. Its loan growth was at 5.4 percent on a year-on-year basis in the September quarter. In an interview with CNBC-TV18, LV Prabhakar, MD & CEO of Canara Bank, discussed the bank’s Q2 performance.
With regard to slippages, he said, “In the beginning of the year, we had said that slippages will be to the tune of about 0.4-0.5 percent of the loan book and excluding SREI Infra, it is at 0.45 percent only. The second point what we said is whatever slippages are there, our recovery will be more than it, which we have shown in this quarter. The reduction is about Rs 7,200 crore, including SREI the slippages are around Rs 6,500 crore.”
He added, “Going forward, our slippage will be somewhere around 0.45 percent only.
On SREI dues, Prabhakar said, “For SREI, the outstanding is about Rs 3,200 crore. I had to make about 15 percent provision, that is about Rs 450 crore. But as an aggressive provision strategy, we made 50 percent, about Rs 1,600 crore. So going forward in Q3 and Q4, I will not be having any pressure on the provisioning.”
Prabhakar said that the bank is targeting a growth rate of about 8 to 9 percent after looking into demand.
On net interest margins (NIMs), he said, “We have given a guidance of about 2.75 percent, again it is minimum. We are hopeful that we will be crossing 2.8 percent in the current quarter. Going forward. I think our target is 3 percent even though our guidance is 2.75 percent but we are hopeful that by 31st March 2022, we will be crossing 3 percent.”
On corporate side demand, he said, “A book of about Rs 20,000 crore is sanctioned to be disbursed. Apart from that, we are getting lot of queries regarding the HAM projects, infrastructure, health sector, cement steel, we have already sanctioned about Rs 5,348 crore under health sector; HAM sector we are very aggressive. The corporate credit loan book for Q3FY22, we are expecting to do more than 7.5 percent.”
On retail demand, Prabhakar said, “In the last five-six quarters continuously, we are showing a growth of more than 10 percent under the retail sector, So, retail will continue growth and increase the pace.”
For full management commentary, watch the video.
(Edited by : Dipikka Ghosh)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
