Shares of Canara Bank plunged over 6 percent on Thursday after the lender reported weak earnings for the fourth quarter of fiscal 2020 amid widening loss, lower net interest income and higher provisions. The stock fell as much as 6.76 percent to Rs 102.05 apiece. At 9:45 am, the shares traded 5.21 percent lower, quoting at Rs 103.75 on the BSE.
The state-run bank reported a net loss of Rs 3,259.33 crore for the quarter ended March 2020 as against a net loss of Rs 551.53 crore in the year-ago period.
Net interest income during Q4FY20 declined 5.2 percent to Rs 3,318.52 crore from Rs 3,500.2 crore, YoY. Pre-provision operating profit dropped 31.4 percent to Rs 2,040.87 crore.
Provisions during the quarter rose 198.2 percent sequentially to Rs 5,375.38 crore. The provision coverage ratio improved to 75.86 percent at the end of March 2020 from 70.97 percent as of December 2019.
On the asset quality front, gross non-performing assets (GNPA) rose 1.1 percent to Rs 37,041.2 crore from Rs 36,645 crore while gross NPA as a percentage of gross advances fell 14.5 bps to 8.21 percent from 8.36 percent, QoQ.
Net NPA declined 14.5 percent to Rs 18,251 crore from Rs 21,337.7 crore while net NPA ratio fell 83 bps to 4.22 percent sequentially.
The bank said that it had availed the option for deferment of the provision in respect of frauds reported for Rs 2,349.59 crore requiring the additional provision of Rs 1,989.26 crore.
“Accordingly, an amount of Rs 497.31 crore has been charged to profit and loss account and an amount of Rs 1,491.95 crore charged to reserves & deferred for adjustment in subsequent quarters,” Canara Bank said in a regulatory filing.
Speaking to CNBC-TV18, LV Prabhakar, MD & CEO of Canara Bank, said that 17 percent of its total loan book is under the moratorium. Of this, 38 percent of SME book and 6 percent of the corporate loan book is under moratorium.
Three percent of NBFCs have taken moratorium while 20 percent of its retail customers have opted for it, he added.
The bank plans to raise Rs 6,000-8,000 crore of capital in Q3FY21. It expects net interest margin to remain around 2.35 percent while credit cost between 2.2-2.5 percent.