Canara Bank aims to further improve its results by focusing on the lending sector
Recording more than double its net profit in the fiscal year ending March 2022, Canara Bank aims to further improve its bottom line with a focus on advances in retail, large and small business, as well as ‘with a greater emphasis on digitization.
In 2021-22, the public lender recorded robust growth of 122% in net profit to Rs 5,678 crore, with operating profit up more than 17% to Rs 23,089 crore.
It had made a net profit of Rs 2,558 crore in the previous financial year ending March 2021.
The challenges emanating from the global macroeconomic scenario have trickled down to the domestic economy, resulting in a slowdown in the growth momentum of the Indian economy. However, there are positive signals for aggregate demand with consumer and business confidence picking up, Canara Bank managing director and chief executive LV Prabhakar said in his 2021-22 annual report.
He said bank credit growth shows signs of gradual recovery and improvement is seen in both exports and imports.
“Going forward, credit growth is expected to accelerate in line with economic growth. Despite the challenges in FY22, your bank demonstrated strong business performance with good growth in deposits and advances,” said Prabhakar in his address to shareholders.
Canara Bank continues to be keen to maintain a well-balanced asset mix, encompassing sectors such as agriculture and micro, small and medium-sized enterprises (MSMEs), as well as focusing on retail assets, including housing , education and car loans, the official said.
“Looking forward, the bank aims to further improve its bottom line with a balanced push on retail, MSME and enterprise advancements, coupled with increased adoption of digitalization to improve efficiency. expects an improvement in CASA and CASA ratio in FY23 by increasing the customer network and adopting an aggressive strategy of building government verticals,” Prabhakar said.
In line with the bank’s strategy, the government affairs vertical will act as the nodal vertical to liaise with ministries. including a focus on opening Single Nodal Agency (SNA) and Central Nodal Agency (CNA) accounts.
In FY22, the bank’s CASA (Current Account Savings Account) performance increased to Rs 3,68,732 crore, up 11.5% from Rs 3,30,656 crore in March 2021. On this amount, savings deposits increased by 12.2% year on year to Rs 3,15,916 crore and current deposits increased by 7.5% from a year ago to Rs 52,816 crore.
This reflects the improvement in the bank’s CASA ratio from 34.33% to 35.88%. The bank has a strong deposit base of around 10.51 crore. Regarding small and medium-sized enterprises, the bank said that lending to MSMEs is one of the priority areas, as the sector supports job creation, export growth and has a positive multiplier effect.
The Bank’s advances to MSMEs stood at Rs 11,9,026 crore with MSE advances of Rs 1,01,716 crore in March 2022. In order to increase the flow of credit to this segment, in FY22, the bank has launched various programs and products based on the needs of specific segments, the bank said in the report.
“The outlook for FY23 is positive with accelerated vaccination of the entire population, the government’s focus on capital spending, and the expected recovery in aggregate demand on continued normalization of economic activities, especially in the second half of the year, with some moderation in growth momentum expected in the short term due to rising inflation on high crude oil prices and high input costs.
“However, the Bank is committed to championing all financial needs of clients and contributing to the inclusive growth of the economy,” Prabhakar said.
He said the bank’s management is very confident of achieving increased growth across all business segments by leveraging digital technology with a strong capital base in fiscal year 2022-23. and beyond. The Bank will continue to focus on asset quality and capital conservation.
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