For the June quarter, Canara Bank reported marginal increase in its net profit due to higher provisioning and increase in its provision coverage ratio to 60%
Canara Bank, the state run lender reported a marginal increase in its first quarter net profit despite posting 22% higher net interest income (NII) and more than double cash recovery.
In a statement, RK Dubey, chairman and managing director (CMD), of Canara Bank said, "The Bank has recorded net profit in excess of Rs800 crore after eight quarters. Last two years, it was below Rs800 crore. It could have gone down this quarter also as we have made lot of provisions and increased our provision coverage ratio to 60% from 58% a year ago.”
For the quarter to end-June, Canara Bank said its net profit inched 2% to Rs807 crore from Rs792 crore even as its total revenues, including interest income, grew 11.6% to Rs11,728 crore from Rs10,508 crore, same period last year.
The public sector lender said during the June quarter, its NII grew 22% to Rs2,429 crore from Rs1,992 crore in June 2013. Canara Bank said it made a record cash recovery of Rs2,019 crore during April-June 2014, compared with Rs888 crore, a year ago period.
Canara Bank made total provisions of Rs988 crore, including tax as against Rs1,106 crore in June 2013 quarter. At the same time, its provisions for non-performing assets (NPAs) more than doubled to Rs1,125 crore from Rs433 core, same period last year.
Canara Bank ended Monday 2.7% down at Rs400, on the BSE, while the benchmark Sensex closed marginally higher at 25,683.
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The lender's June quarter net profit rose due to stable interest income and loan growth. However, for the consecutive quarter, its net profit has fallen below the 30% growth mark
Private sector lender HDFC Bank on Monday reported 21% jump in its first quarter net profit mainly on stable interest income and loan growth. At the same time, for the first time in a consecutive quarter, the lender's net profit had fallen below 30% mark as there was marginal rise in bad loans and decline in in net interest margins (NIMs).
Separately, the lender also clarified that the news report about its merger talks with Housing Development Finance Corporation (HDFC), the country's largest home finance company, is incorrect and no such proposal is being considered by the Bank as on date.
For the quarter to end-June, HDFC Bank said, its net profit rose to Rs2,233 crore from Rs1,844 crore, while total revenues, including interest income rose to Rs13,070.7 crore from Rs11,588.6 crore, same period last year.
Net interest income (interest earned less interest expended) or NIIs during the first quarter increased 17% to Rs5,172 crore, as against Rs4,419 crore in the same period a year ago.
HDFC Bank said its gross non-performance asset (NPA) as a proportion of advances increased to 1.07% against 1.04% in the previous fiscal.
HDFC Bank closed Monday marginally down at Rs826 on the BSE, while the benchmark Sensex closed marginally higher at 25,683.
The move, if approved by the government would benefit incumbent players like Airtel, Vodafone, Idea, RCom, Aircel and Tata Teleservices to bring down cost of spectrum ownership as well as services
Telecom regulator Telecom Regulatory Authority of India (TRAI) on Monday recommended allowing the sharing of all categories of airwaves held by operators including spectrum allocated at the old price of Rs1,658 crore or assigned without auction. This move could help companies significantly reduce the cost of mobile services.
"All access spectrum i.e., Vodafone, Idea. spectrum in the bands of 800/900/1800/2100/ 2300/2500 MHz will be shareable provided that both the licensees are having spectrum in the same band," the regulator said in its recommendation on Guidelines on Spectrum Sharing.
At present, telecom operators have been allocated airwaves frequency in 800 megahertz (CDMA), 900 Mhz, 1800 Mhz, 2100 Mhz (3G), 2300 Mhz and 2500 Mhz (4G) for wireless telecom services.
The Economic Survey had earlier this month recommended the government to come out with better spectrum management through measures like trading and sharing of spectrum so as to bring down the cost of spectrum.
The price of spectrum in last auction was about five times more compared to price of spectrum allocated under old licensing regime. The new regime was notified in August 2013 by the Department of Telecommunications (DoT).
"If any one or both of the licensees, sharing their spectrum, have administratively assigned spectrum (allocated without auction) in that band, then, after sharing, they will be permitted to provide only those services which can be provided through the administratively held spectrum," TRAI had recommended.
At present, telecom operators are allowed to share passive infrastructure like mobile towers which has helped them reducing operational cost but not active infrastructure like spectrum.
The government in February 2012 in-principle approved sharing of only those spectrum under new licensing regime which have been purchased through spectrum auction to increase interest of bidders and enhance revenue generation in the auction.
It has in-principle approved sharing of spectrum allocated without auction on condition that companies holding such airwaves will have to pay one-time spectrum charge which cumulatively amounted to about Rs30,000 crore for both GSM and CDMA spectrum as estimated by Department of Telecom (DoT) last year.
Telecom companies have challenged in various courts the government's decision to impose one-time spectrum charge and the matter is sub judice.
The move to allow sharing of all kind of airwaves if approved by the government, will benefit incumbent players like Airtel, Vodafone, Idea Cellular, Reliance Communications, Aircel and Tata Teleservices to bring down cost of spectrum ownership.