Canara Bank Q4 Results: A Strong Performance Amid Challenges; Net Profit Jumps 90% YoY:

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Canara Bank, one of the largest public sector banks in India, reported a strong performance for the quarter that ended March 2023, despite the challenges posed by the COVID-19 pandemic and the economic slowdown. The bank’s net profit jumped 90% year-on-year (YoY) to Rs 3,175 crore, beating the analysts’ expectations. The bank also announced a dividend of Rs 12 per share for the financial year 2022-23.


Key Highlights of Q4 Results

  • The bank’s net interest income (NII), the difference between interest earned and interest expended, grew 23% YoY to Rs 8,616 crore for the fourth quarter under review. It was Rs 7,006 crore in the corresponding quarter of last year12.
  • The bank’s operating profit stood at Rs 7,252 crore during the March quarter, registering a growth of 17% YoY12.
  • The bank improved its asset quality over a year ago period as the gross non-performing assets (GNPA) ratio reduced to 5.35% in the March quarter, down from 5.89% at the end of March 2022. The net non-performing assets (NNPA) ratio also declined to 1.73% as of March 2023 from 2.65% as of March 202212.
  • The bank’s provision coverage ratio (PCR) stood at 87.31% at the end of the March quarter as against 84.17% in the last year's quarter12.
  • On the operational front, the global business increased by 12% YoY to Rs 20.41 lakh crore as of March 2023 with global deposits at Rs 11.79 lakh crore. Domestic deposits of the bank stood at Rs 10.94 lakh crore at the end of the quarter, showing a growth of 6% YoY12.
  • While the retail lending portfolio increased by 11% YoY to Rs 1.4 lakh crore, housing loans jumped 14% YoY to Rs 84,364 crore12.
  • The bank’s capital adequacy was at 16.68% as of March 2023, including tier-I of 13.78%12.

Dividend and Performance-linked Incentive

The bank’s Board has recommended a dividend of Rs 12 per equity share (i.e., 120%) of the face value of Rs 10 each to the shareholders for the financial year 2022-2312. The final dividend payout is subject to the approval of shareholders at the ensuing Annual General Meeting of the bank.

Considering the bank’s performance, the board has also decided to pay 15 days’ salary as a performance-linked incentive (PLI) to the employees12.

Outlook and Guidance

The bank said that it expects to maintain its growth momentum and profitability in the next financial year, despite the uncertainties caused by the second wave of COVID-19 and its impact on various sectors.

The bank said that it will focus on strengthening its balance sheet, improving its asset quality, enhancing its digital capabilities and customer service, and diversifying its income sources.

The bank also said that it will continue to support various government initiatives and schemes for providing relief and stimulus to various segments of the economy.

Here is a possible recommendation for Canara Bank in simple words based on the search results:

Recommendation: Buy

Canara Bank is a big bank in India. It did very well in the last three months of 2022. It made more money than people expected. It also gave some money to its shareholders.

The bank did better than last year in many ways. It had fewer bad loans, more income, more profit, and more money to lend.

The bank thinks it will do well in the next year too. It will try to make its business stronger, safer, faster, and better. It will also help the government and the people who need money.

The bank’s share price is low compared to its earnings and value. The bank’s share price is also high compared to its lowest price in the last year. Some experts think the bank’s share price will go up by 19% from the current price.

Therefore, we think you should buy Canara Bank shares now and keep them for a long time.

Conclusion

Canara Bank reported a strong performance for the fourth quarter of 2022-23, despite the challenges posed by the COVID-19 pandemic and the economic slowdown. The bank’s net profit jumped 90% YoY to Rs 3,175 crore, beating the analysts’ expectations. The bank also announced a dividend of Rs 12 per share for the financial year 2022-23.

The bank improved its asset quality, operating profit, net interest income and capital adequacy during the quarter. The bank also increased its global business, retail lending portfolio and housing loans.

The bank expects to maintain its growth momentum and profitability in the next financial year, despite the uncertainties caused by the second wave of COVID-19 and its impact on various sectors.

The bank’s stock was trading at Rs 316.40 apiece on NSE on Monday, May 8, 20231, down by 0.67% from its previous close.

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