If you look at the bank's results, please pay attention, because the stock's reaction is showing a rally of around 3.5%. First, let's do one thing — let's understand the results. Our colleague Mitali has done a deep-dive study on this. Let's first understand that, and after that we will also speak with the management. Mitali, first tell us, how were the results?
Yes, you've said absolutely right. There's quite a lot of action being seen in Canara Bank today. The quarterly results that have come in appear to be on a fairly strong side. If we talk about net interest income, the company has reported an increase of nearly 20% there. On the profitability front, growth of 8% is visible. If we talk about operating profit, however, there has been only a 2% rise there.
The company's treasury income has shown some slowdown, due to which the operating income has seen somewhat slow growth there. Besides this, there has been tremendous improvement in asset quality. If we talk about gross NPA, the figure of 2.34% in the same quarter last year has now come down to just 1.33%. Meanwhile, net NPA has been seen at just 3%, and credit costs also appear to be quite well under control. And the management says they are going to keep it under control going forward as well, or it will be seen improving from here.
Business growth was quite strong. In total business, we saw a rise of 16%. Advances grew by 19.5%. Deposits also showed growth of nearly 13%. Besides this, the provision coverage ratio has improved to 95.34%. If we talk about some concerns, the deposit growth figure there appeared somewhat lower. But how it grows going forward and what the management guides will be a subject worth watching. But for now, the numbers that have come in are on a much stronger side, and in today's session the stock is seeing a considerable rally, right after the results came out.
Absolutely, thank you very much, Mitali. Now let's do one thing — let's go straight to the management and understand what their plans are for the future. Because, you see, there has been very good growth in advances, and deposit growth has also been around 13%. So let's understand from the company's top management. Joining us for a special conversation on the results is the MD and CEO of Canara Bank, Brajesh Kumar Singh. Brajesh ji, a very warm welcome to you on Haute House. Thank you very much for taking the time. My first question to you is this: if we look at this quarter's results, we've seen year-on-year growth of nearly 19.5% in advances. But deposit growth has been around 13.13%. How is the management planning to sustain this growth going forward, especially now that the advantage from the FCNR inflows is gone? So how will you continue this growing advances growth going ahead?
We are growing quite well. You said it right — we are growing well in advances, and we are also growing well in deposits. We have a growth of 13-plus percent there, and there is more to come. And the best part is that in the savings bank, in the individual section as well, we are growing at nearly 12%. And our total advances growth is a bit lower — that is because we had some bulk deposits behind which we have settled. Because of that, the growth is slightly lower. But when we go into the next quarter, we feel that we will be able to match our growth with advances on a sustainable basis. And the deposit growth that is happening on a granular basis is very broad-based. So as far as FCNRB is concerned, I think that scheme has ended by August, so there won't be much growth in that. We have already utilized that money in our advances growth, and we have also replaced some of our bulk deposits that were at high cost.
Brajesh ji, namaskar, Abhishek speaking. Sir, one thing that has caught our eye is that net profit has grown 8.5% on a year-on-year basis. But on the operating front, the numbers look somewhat disappointing, because operating profit has grown by only around 2%. So sir, why is there such a difference, please tell us. And the second thing is, how much improvement should we expect in core operating profit in the second half from here?
You must have seen that our net interest income has grown quite well. We have grown it to an all-time high of more than 11,000 crore, with a growth of more than 20% on a YoY basis, and we have also grown more than 7% QoQ. That is our core business. Our operating profit has come down a bit — that has happened because we incurred losses in treasury on a mark-to-market basis. Our yield has hardened a lot, and when yields harden, all banks incur a substantial loss. That loss doesn't go anywhere, but we have to provide for it — we have to provision it out of our profits. Because of that, our operating profit is lower. Whereas if you look at our yield alone, even from June to September, it has hardened by about 44 paise. That has a substantial effect of about ₹1,500–1,600 crore. If you add that, our growth would also look like about 8 to 10%. So this situation will not last forever — it will improve going forward. But our core business — that earnings or loss is from investments. Our core business is taking deposits and giving advances, and in that we earn a net interest margin. Our growth there is happening on a sustainable basis, very well, quarter over quarter. And this time we have earned the highest-ever NII of more than 11,000 crore, and it is growing at more than 20%. So this will remain sustainable for us, and as soon as our yields stabilize a bit, the mark-to-market losses we have made will also come back to us. So the coming days look good to me — we are going to do well in the next quarter.
