Canara Bank share price target

8 Performance at the operating level continued to remain weak due to negative credit growthandsubduedNIM,thiswasfurtheraccentuatedbycleaningupofbalancesheet leadingtohigherNPAprovisionsandresultinginlossofRs39bn....

Canara Bank has reported highest ever loss in its history in 4QFY16 with its new management fully recognising impairment and ensuing provisioning impact of asset reclassification in compliance with AQR by the RBI. Moreover, it has also fully provided for UDAY bonds/SEB exposure and loan to Punjab Govt. This has led to sharp rise in slippages to Rs146bn in 4Q (at slippage ratio of 17.6%) v/s Rs54bn (6.7%) in 3Q & Rs247bn (7.5%) in FY16 v/s Rs109bn (3.6%) in FY15. Further, provisioning expanses grew 527% yoy & 343% qoq to Rs63.3bn as the Bank provided for all AQR cases with additional provisioning on UDAY bond and...

ff The bank has total exposure of Rs180bn towards SEB's restructured loan out of which Rs120bn is covered under UDAY scheme. The bank will convert Rs60bn in state government bonds during 4QFY16E. Hence, NIM will be marginally...

Canara Bank's (CBK) reported 3QFY16 PAT of INR850m (-87% YoY, 77% below est.). Weak core PPoP growth (-27% YoY) and elevated credit costs (1.75% v/s 1.2% in 2Q) led to the miss. NIMs contracted sharply (down 27bp QoQ to 2%) impacted by...

In its 2QFY2016 results, Canara Bank reported a decline in PAT by 15.6% yoy, mainly due to higher provisions and surge in operating expenses. Loan book grows at a slow pace; NIM rises qoq During 2QFY2016, the banks loan book grew by 3.9% yoy with retail loan book growing at a faster pace at 14.3% yoy. The C-D ratio came down to 66.6% from 67.4% in 2QFY2015. Deposits growth was muted at 5.2% yoy with CASA deposits showing momentum, which grew by 11.5% yoy. As a result, the domestic CASA ratio for the bank rose by 178bp yoy to 25.5% as of 2QFY2016. The Reported Global NIM rose sequentially from 2.21% in 1QFY2016 to 2.24% in the current quarter which aided NII growth of 11.8% for the quarter. The Management expects to reach 2.35% NIM by the end of this fiscal year. During 2QFY2016, the non-interest income (excluding treasury) was subdued with a yoy growth of 4.4% yoy largely aided by recoveries from written off accounts. Treasury income, at Rs295cr, more than doubled for the quarter on a yoy basis (Rs144cr in 2QFY2015). On the asset quality front, slippages came at Rs2,202cr (annualized slippage rate of 2.7% as compared to...

Canara Bank reported sequential growth in PAT led by healthy growth in operating income along with decline in provisioning expenses. Operating income grew by 6.3% qoq and 13.8% yoy led by the higher treasury and net interest income. Provisioning expenses declined 10.8% qoq led by 25.5% qoq decline in NPA provision. The bank provided Rs9.8bn for NPA provision in 2Q v/s Rs13.1bn in 1QFY16 due to moderation in fresh slippages. Total slippages stood at Rs22bn (slippage ratio of 2.7%) v/s Rs25.2bn (slippage ratio of 3.1%) in 1QFY16, primarily due to lower slippages from Agri & mid corporate segment. Sequential improvement...

Outlook and valuation: The loan book will see some momentum as the bank aims to improveitsCDratio(currentlyat67%).ThismayaidNIM,butgiventhecutinbaserate,we expectNIMtoremainunderpressure.Stressinthecorporatebookcontinuesanditscourse...

Canara Bank's Q1FY16 profit (Rs 4.8bn, 41% yoy) was below our expectation of Rs 5.4bn dueto(1)higherNPAprovisionsasslippages(Rs25bn)continuedtoremainelevated,and (2)anincreaseintheprovisioncoverageratioby170bps.Operatingprofitgrew12%yoyto...