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Canara bank – Result Review

January 25, 2008

Canara Bank – CanBank is recovering after a poor start to the year – profitability is beginning to claw back after having dipped sharply, the balance sheet continues to be in good shape and sustains improvements, and the quarter is boosted by strong trading gains.

NIMs have now expanded on some loan/deposit restructuring – but at 240bps, are low, and still have some way to go, but management seems a lot more cognizant of this. Fee income is, however, a standout: up over 50%, and with another quarter of strong trading gains, provides the earnings impetus.

CanBank’s asset book now matches with the best – limited deterioration, strong recoveries continue to keep net NPLs below 1%,in contrast to the sector, at average. Growth in the quarter is sub-20%, a little lower than industry.

Stock View on Canara Bank.

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