InvestorQ : How did Canara Bank post such a huge loss for the Mar-20 quarter?
Juvina Maggie made post

How did Canara Bank post such a huge loss for the Mar-20 quarter?

Answer
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Angel dcosta answered.
3 months ago


Canara Bank posted net loss of Rs.3259 crore for the Mar-20 quarter. This is nearly 5 times the loss reported in the Mar-19 quarter. The sharp spike in loss was triggered by lower net interest income and higher provisions. Even the net interest income or NII fell by 5.2% to Rs.3319 crore.

Provisions were 2.7% lower at Rs.5375 crore in the Mar-20 quarter, which is still high levels even in isolation. However, the positive news is the improvement in the provision coverage ratio to 75.86% indicating that most of the potential losses were already factored in. Gross NPAs were slightly lower at 8.21% while net NPAs fell 83 bps to 4.22%.

The provision for frauds has been deferred to later years. Out of the total frauds of Rs.2349 an amount of Rs.497 crore has been charged to the P&L account in the Mar-20 quarter while an amount of Rs.1492 crore has been deferred for adjustment in subsequent quarters. That could be an overhang in the coming quarters.