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View Risks →Canara Bank — Q4 FY24
Canara Bank reported a strong Q4 FY24 with net profit at an all-time high of INR 3,757 crore, up 18.33% YoY, driven by NII growth of 11.18% and improved asset quality (GNPA down 112bps to 4.23%).
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Canara Bank reported a strong Q4 FY24 with net profit at an all-time high of INR 3,757 crore, up 18.33% YoY, driven by NII growth of 11.18% and improved asset quality (GNPA down 112bps to 4.23%). The bank maintained credit cost below 1% and delivered NIM of 3.07% for the quarter. Management guided for FY25 credit growth of ~12% and NIM of 2.95-3%, conservatively, while expecting outperformance. Key drivers include strategic shedding of low-yielding corporate loans, focus on CASA (target 33% by FY25), and technology investments. Risks include potential impact from RBI's draft circular on project loans and elevated operating expenses due to wage revision.
केनरा बैंक ने चौथी तिमाही (Q4 FY24) में शानदार प्रदर्शन किया। शुद्ध लाभ (मुनाफा) ₹3,757 करोड़ रहा, जो अब तक का सबसे ज्यादा है। पिछले साल की तुलना में यह 18.33% बढ़ा। बैंक की ब्याज से कमाई (NII) 11.18% बढ़ी और खराब कर्ज (GNPA) घटकर 4.23% रह गया। बैंक ने कर्ज पर होने वाला खर्च (क्रेडिट कॉस्ट) 1% से कम रखा और ब्याज मार्जिन (NIM) 3.07% रहा। अगले साल (FY25) के लिए बैंक ने कर्ज वृद्धि 12% और NIM 2.95-3% रहने का अनुमान जताया है। बैंक कम ब्याज वाले कॉरपोरेट कर्ज घटा रहा है और CASA (सस्ती जमा) बढ़ाने पर ध्यान दे रहा है। जोखिम में RBI के नए नियम और बढ़ते खर्च शामिल हैं।
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Read Transcript →Quarter Snapshot
Global Business
INR 2,273,000 crore
+11.31% YoY
All-time high global business driven by advances and deposit growth.
CASA Ratio
32.25%
+63bps QoQ
Improved sequentially due to new products and digital initiatives.
Gross NPA Ratio
4.23%
-112bps YoY
Continued improvement in asset quality with lower slippages.
PCR (Provision Coverage Ratio)
89.10%
+179bps YoY
Strengthened balance sheet with higher provisions.
What Changed vs Last Quarter
NEW
CASA ratio target of 33% by FY25
Management aims to achieve 33% CASA ratio by end of FY25 through new products and digital initiatives.
NEW
Cost-to-income ratio to be maintained around 47%
Management expects to keep cost-to-income ratio at or below 47% despite wage revision and IT investments.
UPDATED
Credit growth of ~12% for FY25
Management guided for 10% minimum but expects to achieve around 12% credit growth, driven by RAM and selective corporate lending.
UPDATED
NIM to be maintained at 2.95%-3% for FY25
Despite tight liquidity, management expects NIM to remain in the 2.95%-3% range, with potential upside if liquidity eases.
DROPPED
Cost-to-income ratio below 45% by March 2024
Despite one-time wage provisions, management is confident of achieving cost-to-income below 45% by Q4 FY24.
DROPPED
Capital raising of INR 6,100 crore in next two months
Bank plans to raise remaining AT1 and Tier 2 bonds of INR 6,100 crore when market conditions are favorable.
NEW RISK
RBI draft circular on project loans
New RBI guidelines on project implementation could increase provisioning requirements, though management is confident of managing the impact.
NEW RISK
Elevated operating expenses from wage revision
Staff costs rose sharply due to bipartite settlement arrears and actuarial provisions; normalization expected from Q1 FY25.
NEW RISK
Low-yielding corporate loan book drag
The bank is gradually reducing INR 60,000-70,000 crore of low-yielding corporate loans, which may temper headline credit growth.
NEW RISK
Potential impact of RBI investment reclassification
New accounting norms for investment portfolio could affect treasury profits, though initial impact added INR 1,400 crore to reserves.
RISK GONE
Rising deposit costs pressuring NIM
Management acknowledged that cost of deposits is rising and NIM may face pressure, though they aim to keep it near 3%.
RISK GONE
CASA ratio remains low at 31.65%
CASA growth (5.05% YoY) lags deposit growth (8.55%), impacting funding costs. Management has launched campaigns but no near-term target given.
RISK GONE
Potential slippages from MSME and agriculture
Fresh slippages of INR 2,697 crore were largely from MSME (INR 1,200 crore) and agriculture (INR 1,000 crore), which could persist.
RISK GONE
Regulatory risk weight increase impact on capital
RBI's higher risk weights on NBFC and personal loans reduced capital by 52 bps; CET1 ratio fell to 15.78% from 16.20%.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24
Management aims to increase provision coverage ratio to 90% by March 2024.
Mentioned in Q1 FY24, Q3 FY24
Fresh slippages of INR 2,697 crore were largely from MSME (INR 1,200 crore) and agriculture (INR 1,000 crore), which could persist.
Mentioned in Q1 FY24, Q3 FY24
Management acknowledged that cost of deposits is rising and NIM may face pressure, though they aim to keep it near 3%.
Fast read
Guidance and risk preview
Management guided for 10% minimum but expects to achieve around 12% credit growth, driven by RAM and selective corporate lending.
New RBI guidelines on project implementation could increase provisioning requirements, though management is confident of managing the impact.
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