Public sector player Canara Bank’s net profit fell 21 per cent for the December

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quarter on the back of large provisioning for non-performing loans and reduced interest incomes.

Net profit for the quarter stood at Rs 875.56 crore compared with Rs 1105.73 crore in the corresponding period of last year. “We incurred large provisions for the period, including a major account,” said S Raman, managing director Canara Bank. However, Raman did not name the restructured account.

Gross provisions made by the bank during the quarter amounted to Rs 501 crore compared with Rs 157.28 crore in the same period a year ago. Gross non-performing loans of the bank rose to Rs 3,999 crore, an increase of Rs 1,245 crore over the corresponding period last year. It stood at 1.81 per cent of gross advances.

The bank had reduced net interest income during the period. Net interest income stood at Rs 1918.55 crore compared with Rs 2,089 crore in the year-ago period. The drop in net interest income manifested in net interest margin, which shrank to 2.52 per cent from 3.21 per cent in the same period last year.

However, Canara Bank improved its capital-to-risk weighted asset ratio to 13.22 per cent, which is the highest among public sector banks. It had a tier-I capital of 9.48 per cent. Raman said if December quarter profit was included, the capital of the bank would rise to 14.5 per cent.