InvestorQ : What explains the smart growth shown in the quarterly numbers shown by Canara Bank for the Sep-20 quarter?
Arya Nanda made post

What explains the smart growth shown in the quarterly numbers shown by Canara Bank for the Sep-20 quarter?

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Anjana Aiyar answered.
4 weeks ago
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Canara Bank reported 46.3% growth in revenues for the Sep-20 quarter at Rs22,681cr. Operating profit were sharply higher by 75.56% at Rs4,670cr. Similarly the net profit for the Sep-20 quarter was up by a more modest 15.03% at Rs466cr. Interestingly, provisioning was doubled in this quarter.

In terms of margin performance, the OPM was up over 340 bps at 20.59% while NPM was lower by 56 bps due to higher provisioning and a much larger revenue base in the quarter. Net margins fell to 2.05% due to the overall margin impact of provisioning.

On the asset quality front, the gross NPAs were marginally lower but continued to remain elevated at 8.26% in absolute terms. That is still a cause for concern. But, reduction in net NPAs shows higher provisioning, although like most PSU banks, that is still a worry.

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