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Canara Bank shares end higher after Net Interest Margin, asset quality improve to multi year high

business | Jan 23, 2023 4:58 PM IST

Canara Bank shares end higher after Net Interest Margin, asset quality improve to multi-year high

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Canara Bank's asset quality improved sequentially, with Gross NPA at 5.89 percent from 6.37 percent in the September quarter.

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Shares of Canara Bank ended higher on Monday after the lender's Net Interest Margin of 2.93 percent in the December quarter was the highest in 29 quarters.

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The bank's Net Interest Income increased 23.8 percent from last year to Rs 8,600 crore, higher than the CNBC-TV18 poll of Rs 7,856.3 crore. Net profit nearly doubled from last year to Rs 2,881.5 crore, which also surpassed the poll expectation of Rs 2,611.2 crore.
Asset quality improved sequentially, with Gross NPA at 5.89 percent from 6.37 percent in the September quarter. Net NPA also improved to 1.96 percent from 2.19 percent sequentially. While gross NPA was the lowest in 28 quarters, Net NPA was the lowest in over 30 quarters.
Canara Bank's return ratios are also the best in seven to eight years with Return on Equity (RoE) crossing the 20 percent mark for the first time in many years. The bank's international business outpaced the domestic business growth rate sequentially for the seventh quarter in a row.
Slippages for the quarter stood at Rs 3,210 crore compared to Rs 3,948 crore in the September quarter.
The bank's exposure to the NCLT reduced 6.5 percent sequentially to Rs 40,905 crore, which now forms 4.81 percent of total loans. The same figure in the September quarter stood at 5.31 percent of overall loans.
Other Key Takeaways:
  • Advances up 16.6 percent year-on-year to Rs 8.5 lakh crore
  • Deposits up 11.5 percent year-on-year to Rs 11.63 lakh crore
  • CASA ratio at 32.55 percent is the lowest in 12 quarters
  • Corporate loan growth remains strong for the third straight quarter
  • Annualised credit cost at 0.9 percent is the lowest in 30 quarters
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