The Hindu Business Line : Canara Bank Q1 net dips 44 pc to Rs 186.9 cr

CANARA Bank posted net profit of Rs 186.9 crore for the first quarter of the fiscal, down from Rs 336.44 crore in the corresponding period of the previous year.

The bank, however, made a provision of Rs 373.40 crore, of which Rs 114.52 crore was for non-performing assets (NPAs) and depreciation on investments to the extent of Rs 188.42 crore.

Operating profits for the quarter were Rs 560.30 crore, and "notwithstanding the subdued treasury earnings - a feature secular to the industry - the bank has done well in its core business and is set to meet targets during the financial year,'' said the Chairman and Managing Director, Mr M.B.N. Rao.

Total income rose 2.42 per cent to touch Rs 2,238.58 crore while total expenditure rose 8.9 per cent to Rs 1,678.28 crore. Net NPAs came down to 1.67 per cent in the first quarter of 2005-06 from 2.9 per cent in the corresponding period of the previous fiscal.Net NPA volumes also came down to Rs 987.85 crore and the bank recovered cash of Rs 180 crore during the first quarter. The bank is targeting a further cash recovery of Rs 785 crore to bring NPAs below 1.2 per cent, according to Mr Rao.

Canara Bank planned to roll out its core banking solution covering 1,000 branches in the next few quarters. It also planned to increase its manpower training fourfold in the next few quarters to enable human resources to increase their contribution to the business, he said.Infrastructure finance, including road, power generation and airports, to the extent of Rs 2,000 crore had been approved during the year, while outstanding agriculture credit grew nearly 41 per cent to touch Rs 9,112 crore.

The bank targeted a total lending of Rs 11,000 crore to agriculture while also focussing on advances to the SME sector, Mr Rao said.

"Retail will drive growth and the bank will focus on fee-based income improvements," he said, adding that the focus would also be on product proliferation and agri-lending. The bank expected to raise Rs 500 crore of Tier II capital in the coming months.

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