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CANARA BANK

By Tony Harris,2015-01-09 20:15
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CANARA BANK

    PRESS RELEASE

    April 29, 2009

    Net Profit for Q4 up by 55%, At Rs.719 Cr

    Aggregate Business crossed Rs.3.25 Lakh Cr

    Canara Bank's net profit for Q4 of FY 09 rose to Rs.719 crore recording a 54.9% increase over the net profit of Rs.464 crore for Q4 of FY 08. For the year ended March

    2009, net profit of the bank rose to Rs.2072 crore recording a 32.4% increase as compared to Rs.1565 crore for the year ending March 2008.

The Bank has made a total provision of Rs.1891 crore including a provision of Rs.900

    crore for NPA. The Bank has additionally provided Rs.150 crore towards likely wage

    revision for staff.

Aggregate business of the Bank saw a robust increase of Rs.63800 crore to cross the

    Rs.3.25 lakh crore as at the end of March 2009.

The Bank's operating profit for Q4 grew by 35.5% to reach Rs.1273 crore, taking the

    operating profit for FY09 to Rs.3964 crore compared to Rs.2959 crore in FY08.

    The Board of Directors has proposed a dividend of 80% for the year amounting Rs.328 crore.

Aggregate business reached a level of Rs.325112 crore, recording a y.o.y growth of

    24.4%. Aggregate business comprised total deposits of Rs.1,86,893 crore and advances of Rs.1,38,219 crore. While the growth in total deposits was 21.3%,

    advances recorded a robust growth of about 29%.

The Bank's core deposits recorded a growth of 38%, supported by 56% growth in retail

    term deposits and over 18% in savings deposits. The share of CASA deposits in

    domestic deposits stood at 30.7%. The quantum addition in savings deposits was

    Rs.6544 crore during FY09, as against Rs.2832 crore in FY08.

Responding to emergent credit needs of varied segments of the economy that evolved

    during post September 2008 scenario, the Bank has stepped up credit to all productive

    segments of the economy. In quantum terms, credit increased by about Rs.31000 crore

    during FY09.

    With accelerated growth in advances, credit to deposit ratio further improved to 73.96% as at March 2009, compared to 69.6% a year ago.

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    Bank's Capital to Risk Weighted Assets Ratio (CRAR) as at March 2009 improved to 14.10%, well above the 9% regulatory requirement. Out of this, Tier I capital ratio

    accounted for 8.01%. The Bank's capital position is one of the strongest among its

    peers. Given the still undiluted 73.17% Government of India holding, the Bank has large

    headroom available under both Tier I and Tier II options to raise capital and support

    business growth momentum.

Earnings Per Share (EPS) improved to Rs.50.55 as at March 2009 from Rs.38.17 a

    year ago. Book Value rose to Rs. 244.87 from Rs.202.33 as at March 2008. Return

    on Average Assets (RoAA) for the Q4 rose to 1.47% compared to 1.09% for the same

    quarter a year ago. RoAA for FY09 improved to 1.06% compared to 0.92% for FY 08.

Total income of the Bank rose to Rs.19430 crore with a y.o.y growth of 18.4%. In

    particular, interest income from loans/advances recorded a growth of 30%.

Responding to numerous steps initiated to control overall expenditure, increase in

    operating expenses for the year was contained at 9.8%.

Net interest income for Q4 of FY09 rose to Rs.1305 crore from Rs.922 crore a year ago,

    recording a growth of 41.5%. Net interest income for the year recorded a growth of

    33.4% to reach Rs.4718 crore as against Rs.3538 crore for FY 08. The Bank's Net

    Interest Margin (NIM) increased from 2.42% at March 2008 to 2.78% by March 2009,

    up by 36 bps.

Non-interest income of the bank increased to Rs.2311 crore for FY09. Fee-based

    income recorded a growth of 18% over FY08.

    Productivity, measured as Business per Employee, rose to Rs.7.80 crore as at March 2009, compared to Rs.6.10 crore a year before. Per branch business moved up to

    Rs.119 crore as against Rs.98 crore at March 2008. The Bank added 2.45 million

    clientele during the year, taking the total clientele base to 34.8 million. In particular, the number of savings bank accounts recorded a significant increase.

    The Bank’s gross NPA ratio increased to 1.56% and net NPA ratio to 1.09% as at

    March 2009. Nevertheless, there was a noteworthy reduction in both absolute and

    percentage terms compared to December 2008. Cash Recovery for FY09 increased to

    Rs.1289 crore compared to Rs.1030 crore recorded for the previous financial. Going

    forward, the Bank will be placing overriding thrust on NPA management, monitoring of

    assets quality on an ongoing basis, containing fresh slippages and also extending

    restructuring and reschedulement benefits to all eligible accounts. The Bank

    restructured a total number of 72184 accounts during 2008-09, aggregating to a total

    outstanding of Rs.2066 crore under the special regulatory treatment.

Advances to priority sector reached Rs.48763 crore, forming 46.02% of the adjusted

    net bank credit (ANBC) well above the stipulated 40% norm. Credit to agriculture rose

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    to Rs.20144 crore, covering 26 lakh farmers. Notably, the Bank’s outstanding agricultural advances surpassed the 18% ANBC norm to reach 19.01% for the year.

    The Bank's credit to Micro, Small and Medium Enterprises (MSMEs) grew by a healthy 28% to reach Rs.23823 crore. Keeping in view the current challenges facing the

    MSME segments, the Bank has implemented Special Package with reduced interest rates to help these segments access easy credit.

    With a disbursal level of Rs.4558 crore, the Bank's retail lending portfolio stood at Rs.19798 crore as at March 2009. To boost credit offtake in housing and automobile

    sectors, currently suffering from demand slowdown, the Bank has announced special packages. In order to boost housing loan portfolio, the Bank has announced a

    competitive special package with reduced rate of interest and other freebies. The

    Bank’s reduced rate of interest for loans upto Rs.30 lakh has been capped at 8.25% for

    12 months and thereafter at 9.25% for next 48 months, making it fully insulated from

    any interest rate movement for 60 months. To give a push to automobile sector, the

    Bank, besides offering competitive interest rate, has entered into tie-up arrangements

    with four major auto-makers in India viz., M/s Hyundai Motor India Ltd, M/s. Swaraj

    Mazda Ltd, M/s. Maruti Suzuki Ltd and M/s. Tata Motors for financing both commercial vehicles and cars including the recently launched Tata-NANO cars.

    Sustaining its premier position among the nationalized banks, the Bank's education loan portfolio increased to Rs.2301 crore as at March 2009. Education loans recorded a

    y.o.y growth of 33%, covering more than 1.46 lakhs students.

Pursuing its commitment to the financial inclusion process, the Bank achieved Total

    Financial Inclusion in all the 25 Lead Districts spread over five states viz., Karnataka,

    Kerala, Tamil Nadu, Bihar and Uttar Pradesh. The Bank has mobilized 5.62 lakhs no-frill

    accounts during the year, taking the tally under such accounts to 17.3 lakhs since

    inception.

As at March 2009, number of branches increased further to 2733, including 3

    overseas branches and an Offshore Banking Unit in India. Besides, the Bank has 170

    Extension Counters. The Bank has over 2000 ATMs spread across the country for easy

    access by its customers and other users.

    Over 1050 branches have already come under Core Banking Solution (CBS), covering 77% of the Bank's business. While 2062 branches are enabled under

    Anywhere Banking services, 1362 branches are now providing Internet and Mobile Banking services. All branches of the Bank have been enabled for electronic funds

    transfer under RTGS and NEFT facilities. Focusing on increasing ATM usage, the Bank

    could add a significant 2.46 million debit cards during the year, taking the tally under

    debit card base to 5.75 million as at March 2009.

Global financial turmoil notwithstanding, all foreign branches of the Bank continued to

    be profit making as at March 2009. The Bank's newly formed subsidiaries, namely,

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Canara Robeco Asset Management Co. Ltd and Canara HSBC Oriental Bank of

    Commerce Life Insurance Co. Ltd, which are now into their first year of operation, are

    making good progress.

The Bank has already obtained approval from the Reserve Bank of India to open 10

    branches/offices in Johannesburg, Frankfurt, Muscat, Manama, QFC-Qatar,

    Leicester, New York, Sao Paulo, Dar-er-Salam and Tokyo, out of the 21 international financial centres identified for global expansion in the medium term.

    In recognition of the varied initiatives, the Bank was conferred with several awards and accolades during the year. Some prominent awards received are as under:

    ? Golden Peacock National Training Award 2008 for excellence in training.

    ? Global HR Excellence in Training, an award conferred by the Asia Pacific HR

    Congress, the largest rendezvous of HR Professionals, at its Employer Branding

    Talent Management Congress held on 22nd and 23rd August, 2008, Delhi.

    ? Best Corporate Social Responsibility Practice Award, instituted by BSE,

    NASSCOM and Times Foundation.

    ? The Bank won two Silver Corporate Collateral Awards for Best Corporate Ad in

    the Print Media and Best Corporate Film on Corporate Social Responsibility

    at the Public Relations Council of India Awards 2009.

Goals for FY10

     The Bank aims to take the aggregate business to Rs.4,00,000 crore mark,

    comprising Rs.2,25,000 crore total deposits and Rs.1,75,000 crore advances.

     The Bank will continue to focus on core business, with the objective of

    augmenting profits and profitability.

     Productive segments like Agriculture, Corporates, MSMEs, Retail including

    housing, auto and education, infrastructure and other potential growth segments

    will significantly drive the Bank’s credit growth.

     All branches are slated for full coverage under CBS by March 2010.

     Over 200 new branches to be opened during the year.

     Technological automation will be leveraged fully to provide a wide range of value-

    added services to our vast cross-section clientele and sustain business growth.

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