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Canara Bank posts Rs 2,236 crore net loss in FY20 on higher provisions

In Q4 FY20, Canara Bank's net loss widened to Rs 3,259.33 crore as compared to net loss of Rs 551.53 crore during the same period last year

twitter-logoBusinessToday.In | June 24, 2020 | Updated 20:28 IST
Canara Bank posts Rs 2,236 crore net loss in FY20 on higher provisions
Canara Bank made a provisioning of Rs 5,375.38 crore for the March quarter of FY20

State-owned Canara Bank closed financial year 2019-20 (FY20) with net loss of Rs 2,235.72 crore as compared to net profit of Rs 347.02 crore in 2018-19, due to increase in provisions. Total income of the public sector bank increased by 6.3 per cent to Rs 56,748 crore in FY20 as against Rs 53,385.30 crore in FY19.

Canara Bank's net loss widened to Rs 3,259.33 crore during the fourth quarter ended March 2020 as compared to net loss of Rs 551.53 crore during the same period last year. The loss was attributed to higher provisions, harmonisation with Syndicate Bank, and amount for wage revision.

Its total income, however, increased to Rs 14,222.39 crore, compared with Rs 14,000.43 crore in the year-ago period, Canara Bank said in a filing to the Bombay Stock Exchange.

The bank, which amalgamated Syndicate Bank with itself on April 1 this year, made a provisioning of Rs 5,375.38 crore for the March quarter of FY20 compared to Rs 5,523.50 crore in the corresponding period last year. "Provision Coverage Ratio (PCR) improved to 75.86 per cent as at March 2020 from 68.13 per cent as at March 2019," Canara Bank said.

Also Read: Canara Bank loans get cheaper; interest rates slashed up to 75 bps

On asset quality front, gross non-performing assets (NPAs) continued to remain at an elevated level of 8.21 per cent in Q4 FY20, slightly better than 8.83 per cent in Q4 FY19. The percentage of net NPA stood at 4.22 per cent against 5.37 per cent last year.

In absolute terms, the gross NPAs or bad loans of the bank were at Rs 37,041.15 crore as on March 31, 2020, compared to Rs 39,224.12 crore in the year-ago period.

The bank said that it has achieved targets in priority sector and agricultural credit at 44.66 per cent and 18.58 per cent of Adjusted Net Bank Credit (ANBC) as on March 2020, against the mandatory target of 40 per cent and 18 per cent, respectively. Credit to weaker sections stood at Rs 94,619 crore, and loans to women beneficiaries stood at Rs 59,827 crore as on March 2020.

The bank has opened 76.38 lakhs accounts under Pradhan Mantri Jan Dhan Yojana (PMJDY) and mobilised CASA deposits of Rs 2,874 crore as at March 2020, it added.

On COVID-19, Canara Bank said that due to lockdown impact on economy, the situation continues to be uncertain and the bank is evaluating the situation on an ongoing basis.

Also Read: Bank of Baroda posts net profit of Rs 546 crore in FY20; provisions fall 4%

"The major identified challenges for the bank would arise from eroding cash flows and extended capital cycles. The bank is gearing itself on all the fronts to meet these challenges. The management believes that no adjustments are required in the financial results as it does not significantly impact the current financial year," it said.

Despite these events and conditions, there would not be any significant impact on the bank's results in future and going concern assumptions as at presently made, it added.

Ahead of earnings report, shares of Canara Bank ended Wednesday's trade at Rs 109.45 apiece, down 3.95 per cent, as against previous closing price of Rs 113.95 on the Bombay Stock Exchange.

By Chitranjan Kumar

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