Bengaluru: State-run Canara Bank on Friday posted a massive 87 percent plunge in its net profit at Rs 85 crore in the quarter to December, pulled down by higher provisioning for bad loans.
The bank had registered a net profit of Rs 656 crore in the corresponding quarter a year ago.
Total income during the quarter fell to Rs 12,050 crore from Rs 12,228 crore in the October-December period a year earlier.
A higher provisioning against bad loans has hit the bank's net profit which has come down to Rs 85 crore, Canara Bank CFO N Selvarajan told reporters here.
MD and CEO Rakesh Sharma said, "Yes, there is a reduction (in profit) compared to last year. It was mainly because as per AQR (asset quality review) we have been able to identify those NPAs so that we can take all corrective steps."
"Once having identified those NPAs, we will be taking steps and now we will be strengthening our recovery part also," he said.
The bank's percentage of gross Non Performing Assets (NPAs) rose to 5.84 percent from 3.35 percent in the same quarter a year ago.
Its percentage of net NPAs went up to 3.90 percent from 2.42 percent at the end of December 2014.
Gross NPAs in absolute terms rose significantly to Rs 19,813.44 crore as compared to Rs 10,573.57 crore at the end of December 2014.
Total provisions of the bank, excluding for income tax, during the third quarter were Rs 1,428.85 crore as against Rs 841.33 crore in the year-ago period.
Operating profit declined to Rs 1,552.44 crore as against Rs 1,797.30 crore in the corresponding period.
Canara bank said its Net Interest Margin (NIM) (Domestic) was at 2.29 percent and NIM (global) at 2.16 percent, and Cost-income ratio marginally improved to 49.46 percent from 49.84 percent last year.
Provision coverage ratio of the bank stood at 53.96 percent, compared to 59.44 percent last year.
Stating that Capital Adequacy Ratio as per Basel lll norms improved to 11.54 percent, the bank also said there is adequate headroom available to raise capital to support business growth momentum.
It said total number of branches increased to 5,794, including seven overseas branches as of December 2015 and number of ATMs increased to 9,144.