The state-owned bank’s operating profit stood 12% higher at Rs 8,554 crore.
Its net interest margin (NIM) for the quarter stood at 2.55% as compared with 2.9% in the year ago period.
“Some stress on NIM is likely to continue given the anticipation that the Reserve Bank of India may reduce repo rate furter in August,” Canara Bank managing director K Satyanarayana Raju said responding to a query from ET.
“We have lowered deposit rates from June 9. As a result there would be a reduction in the cost of deposits, which will give some cushion to NIM. Stress on NIM may not impact the bottomline as we are focusing on fee income,” Raju said.
Investors gave thumbs up to the numbers. The bank’s share price jumped 5.3% Thursday to Rs 113.50 on BSE while the Sensex ended 0.66% lower.The bank’s net interest income for the quarter was at Rs 9009 crore, about 2% lower than what it was in the corresponding period last year. The non-interest income at Rs 7060 crore was buoyed by treasury earnings, which jumped 296% year-on-year at Rs 1993 crore. Fee-based income rose 16.4% year-on-year to Rs 2223 crore. The state-owned lender’s asset quality improved with gross non-performing assets ratio dipped 145 basis points to 2.69% at the end of June from 4.14% a year back. Net NPA improved to 0.63% from 1.24% over the same period. Its provision coverage ratio stood to 93.17%.
The bank’s total deposits increased by 9.9% year-on-year to Rs 14.7 lakh crore while gross advance rose 12.4% to Rs 10.96 lakh crore.