Canara Bank — Q2 FY24
Canara Bank reported a strong Q2 FY24 with net profit surging 42.81% YoY to INR 3,606 crore, driven by 19.76% YoY NII growth and improved asset quality.
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
83%Questions answered1Evaded / deflected12Questions audited
Answered
High priority
Outlook for margins given festive loan rate cuts and deposit competition.
Asked by Mahrukh Adajania
Management gave a clear range (3.05 to 2.9) based on liquidity scenario.
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Question
Sir, basically, my first question is on the outlook ahead for margins, and the reason for that is in the festive season, all banks are offering lower rates on incremental loans... and all banks have increased their, flagship deposit rates as well. So would that, from year on, will we be able to hold margins at three, or what is the outlook like?
K. Satyanarayana Raju, Managing Director and CEO
If the liquidity improves in the system for next two quarters, then inflow may increase. If the inflow increases, our cost of deposit may come down, then we may able to maintain the around 3.05 what we projected. But if the current scenario continues... we may land up at 2.9.
Partial answer
Medium priority
Impact of new RBI investment guidelines on Canara Bank.
Asked by Mahrukh Adajania
Acknowledged minimal impact but gave no specific numbers or details.
no quantificationvague assessment
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Question
My next question is on the new investment guidelines by RBI, which are not yet applicable. What will be the impact on Canara Bank?
Debashish Mukherjee, Executive Director
We have made some assessment. Not much impact will be there in our case, because our mostly holdings are in HTM portfolio, so not much impact. That is all we can say right now.
Answered
High priority
Details on other provisions of INR 222 crore and LRD account.
Asked by Mona Khetan, Dolat Capital Market
Explained the specific account and cumulative provisioning amount.
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Question
So my first question is on the provisioning lines. There is this other provisions of INR 222 crore. What exactly is that about?
K. Satyanarayana Raju, Managing Director and CEO
We have some stress in one big account of LRD. ... in anticipation in future, if any shocks is there to prepare ourself, we are providing additional provision for that. ... last two quarters also, we have provided INR 458 crore for that account. The same account, now we have provided additional INR 200 crore.
Evasive
High priority
Size of the LRD account and provisioning percentage.
Asked by Mona Khetan, Dolat Capital Market
Avoided giving the account size or provisioning percentage despite repeated asks.
no absolute size givenrefused to disclose percentage
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Question
And how large is this account? I mean, we have provided INR 650, so what - how much have you provided?
K. Satyanarayana Raju, Managing Director and CEO
This it will be sufficient to meet the requirement of the provisioning.
Answered
High priority
Restructured book outstanding and slippage during the quarter.
Asked by Mona Khetan, Dolat Capital Market
Provided specific outstanding and NPA figures for restructured book.
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Question
And just finally, on the restructured book, can you share the outstanding amount and how much has slipped through the quarter so far?
K. Satyanarayana Raju, Managing Director and CEO
See, including RF one, RF two, and MSME restructuring everything, originally it was INR 24,000 crore, madam. As on date, it is approximately INR 20,000 crore outstanding was there, and INR 14,000 crore still continuing in the standard assets. Around INR 6,000 crore is under NPA.
Partial answer
Medium priority
CASA improvement strategy and target.
Asked by Speaker 13
Described initiatives but did not provide a specific CASA percentage target.
no numeric target givenvague timeline
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Question
So going forward, sir, are we doing something aggressive even in this scenario? Is it possible to increase CASA, and what is our target so that we become more competitive in the market on the interest rate front, sir?
K. Satyanarayana Raju, Managing Director and CEO
We strongly believe that CASA can be garnered by improving our customer service, by reconnecting with them. ... our first focus is we don't want to slip from that, the existing percentage, we want to maintain that, and there afterwards, we want to further, build on that with our initiatives.
Answered
Medium priority
Reason for jump in interest on balance with RBI.
Asked by Mayank Kumar Ganguly, Centrum India
Explained the market-driven nature of the increase.
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Question
So first, like, interest on balance with RBI, that amount used to be INR 500 crore-INR 600 crore one year back, and it has increased to INR 1,000 crore-INR 1,100 crore. Can you tell like, like jump in the balance?
K. Satyanarayana Raju, Managing Director and CEO
See, the interest earned is generally when there is a liquidity issue is there in the market. If your treasury operations are effective, whatever that's overnight lending to the other required needy reported entities, so you can earn more interest.
Answered
Medium priority
Reason for jump in miscellaneous fee income to INR 840 crore.
Asked by Mayank Kumar Ganguly, Centrum India
Attributed the increase to passing on debit card costs to customers.
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Question
And, within a fee-based income, this quarter, miscellaneous has jumped to, like, INR 840 crore. It used to be INR 500 crore-INR 600 crore. So can you share, like, jump in that line?
K. Satyanarayana Raju, Managing Director and CEO
Just see, debit card annual fee, that check. ... the plastic card cost was increased enormously last year, from INR 24 to INR 84. ... from December onwards, it was started passing on to the customers. That has helped us in getting the same amount.
Answered
High priority
Whether the LRD account stress is specific or sector-wide.
Asked by Anand Dama, Emkay Global Financial Services
Clearly stated it is a single account, not sector-wide stress.
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Question
So basically, the LRD account that you're referring, is it more specific to, the bank where you or basically that account itself, where you're seeing a stress, or is there a general stress in the LRD segment?
K. Satyanarayana Raju, Managing Director and CEO
It's a specific. That's, that is a specific, only single account.
Answered
High priority
Reason for increase in loan yields QoQ and NPA interest component.
Asked by Jai Mundra, ICICI Securities
Explained yield increase due to shift to RAM and repricing corporate loans.
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Question
So loan yields, whichever way I calculate, they have increased at least by 25 basis points QOQ. ... any comments there?
K. Satyanarayana Raju, Managing Director and CEO
We are focused more on RAM sector, where our average yield is always around the 9%. ... in the corporate sector also, we are trying to reprice our existing low-yielding advances. ... that is helping us in maintaining that increase in the average yield.
Answered
Medium priority
Assumed wage hike percentage for provision of INR 345 crore.
Asked by Ashlesh Sonje, Kotak Securities
Provided the exact assumed percentage of 15%.
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Question
Firstly, on the wage hike provision, which you have taken at about INR 345 crore, what is the percentage wage hike which we are assuming here?
K. Satyanarayana Raju, Managing Director and CEO
15%. Actually, the last two wage revision, it was around 14%-15%, the settlement was happened. In anticipation of the same line, we are continuing to provide 15% every month.
Answered
High priority
Fresh slippages breakup for the quarter.
Asked by Operator
Provided a detailed breakup of slippages by segment.
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Question
Sir, we have one question from the chat box. If you could provide slippages breakup for this quarter?
K. Satyanarayana Raju, Managing Director and CEO
Sir, you can note down that, that is INR 800 crore is from agriculture, INR 900 crore from MSME, INR 400 crore from retail, the remaining is corporate. Corporate is around INR 750 crore, sir.