Canara Bank Q4 Review - Asset Quality Contained; Recoveries Aid Profitability: Dolat Capital
A pedestrian walks past State Bank of India and Canara Bank automated teller machines in Mumbai. (Photographer: Adeel Halim/Bloomberg)

Canara Bank Q4 Review - Asset Quality Contained; Recoveries Aid Profitability: Dolat Capital

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Canara Bank’s net interest income declined 8% QoQ as interest reversals of Rs 7.25 billion, lower spreads, and excess liquidity pressurised net interest margin.

Profit after tax was in line and benefited from higher other income, driven by recovery from Bhushan Power Ltd. exposure.

Asset quality metrics were impressive with slippages at 2.9% for FY21 (against 3.8% in FY20 for the consolidated entity), 46 basis points YoY decline in pro forma gross non performing assets ratio, and 60% provision coverage ratio.

Led by provisions write back from Bhushan recovery, the bank made Covid-19 related provisions of Rs 5 billion during the quarter and up fronted Rs 6.7 billion towards fraud accounts avoiding any further carryover.

Click on the attachment to read the full report:

Dolat Capital Canara Bank Q4FY21 Result Update.pdf

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