Canara Bank aims to improve bottom line further with a balanced focus on retail, business lending

New Delhi: Recording over a two-fold jump in its net profit in the fiscal year ended March 2022, Canara Bank aims to improve its bottom line further with a balanced focus on advances to retail, big and small businesses, coupled with a greater focus on digitization.

During 2021-22, the state-owned lender recorded a robust growth of 122 percent in its net profit at Rs 5,678 crore, with operating profit rising by over 17 percent to Rs 23,089 crore.

It had earned a net profit of Rs 2,558 crore in the preceding fiscal year ended March 2021.

The challenges emanating from the global macro scenario reflected on the domestic economy, leading to a slowing down of 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 officer L V Prabhakar said in its annual report 2021-22.

He said bank credit growth is indicating signs of gradual recovery and improvement is being observed in exports and imports.

”Going forward, credit growth is expected to gain traction in tandem with economic growth. Despite the challenges of FY22, your bank has demonstrated robust business performance with good growth in both deposits and advances,” Prabhakar said in his address to the shareholders.

Canara Bank is always keen on maintaining a well-balanced asset mix, encompassing sectors such as agriculture and Micro, Small, and Medium Enterprises (MSMEs) as well as keeping a focus on retail assets, including housing, education, and vehicle loans, the official said.

”Going ahead, the bank aims at improving the bottom line further with a balanced thrust on retail, MSME, and corporate advances coupled with increased adoption of digitalization for efficiency improvement. The bank expects improved CASA and CASA ratio in FY23 by increasing customer network and adopting the aggressive strategy of setting up of government business verticals,” Prabhakar said.

As per the bank’s strategy, the government business vertical will act as the nodal vertical for liaisoning with government departments. including a focus on the opening of Single Nodal Agency (SNA) & Central Nodal Agency (CNA) accounts.

In FY22, the bank’s CASA (Current Account Savings Account) performance increased to Rs 3,68,732 crore, up by 11.5 percent from Rs 3,30,656 crore as of March 2021. Of this, savings deposits grew by 12.2 percent on year to Rs 3,15,916 crore and current deposits by 7.5 percent from a year ago to Rs 52,816 crore.

This reflected the CASA ratio of the bank improving from 34.33 percent to 35.88 percent. The bank has a strong deposits clientele base of about 10.51 crore. On small and medium enterprises, the bank said MSME lending is one of the thrust areas, as the sector supports employment generation, and export growth and has a positive multiplier effect.

Bank’s advances to MSME stood at Rs 11,9,026 crore with MSE advances of Rs 1,01,716 crore as of March 2022. To increase credit flow to this segment, in FY22 the bank has launched various need-based schemes and products catering to the needs of specific segments, the bank said in the report.

”The outlook for FY23 is positive with accelerated vaccination of the larger population, government focus on CAPEX, and expected pick-up in aggregate demand on further normalization of economic activities, particularly in the second half of the year, with some moderation in growth momentum expected in the near term due to rising inflation on elevated crude oil prices and high input costs. ”However, the Bank is committed to champion in meeting all financial needs of the customers and contribute to inclusive growth of the economy,” Prabhakar said.

He said the bank’s management is highly confident about achieving augmented growth across all business segments by leveraging digital technology with a robust capital base in the financial year 2022-23 and beyond. Bank will continue its focus on asset quality and capital conservation.