BANGALORE: Canara Bank on Wednesday posted 28 per cent decline in net profit to `725.8 crore for the first quarter ended June 30, 2011. The public sector bank said that this sum was below what they achieved in the last quarter, but also cited three reasons for the same.
Announcing the First Quarter results on Wednesday, CMD S Raman said that the increase in provision on NPA to the extent of `285 crore as per Reserve Bank of India (RBI) guidelines issued during May 2011. He added that the reversal of interest to the tune of Rs 210 crore due to slippages under system driven by NPA was another reason. He said that the decline in trading profit, to the tune of `300 crore due to the rising in G-Sec yield was the third reason for the low Net Profit. “We have invested into these and thats why our profits seem out of place, otherwise we would have posted better profits ranging around `1,500 odd crore”, he clarified.
Raman also said that the Bank had taken an ‘aggressive posture’ and had brought all accounts of above `2 lakh under Automatic or system driven Non-Performing Asset (NPA) He shared that the RBI had required all accounts above `1 crore to be under system driven NPA, but Canara Bank had done this for all accounts above `2 lakh.