Canara Bank share price target

Canara Bank (CBK) reported a decent Q2, driven by pick-up in advances (up 10% YoY), stable NIM (2.34%; flat QoQ) and headline asset quality (GNPLs at 10.5%; down 5 bps QoQ) and 56 bps QoQ improvement in CASA deposits to 31.2% leading to in-line PAT of Rs 2.6 bn (down 27% YoY).

Elevated Credit Cost Continue to Impede Performance Canara Bank has delivered a healthy operating performance in 2QFY18. Its operating profit surged by 15.8% YoY and 0.3% QoQ to Rs24.8bn led by strong growth in NII (14.1% YoY & 2.6% QoQ to Rs27.8bn) and relatively lower opex (7.5% YoY and -4.7% QoQ) of Rs22.4bn. However, provisioning expenses remained at elevated level of Rs21.6bn (36% YoY & -2.1% QoQ) due to higher stressed assets in balance sheet. Resultantly, the Bank's net profit declined by 27.1% YoY (+3.4% QoQ) to Rs2.6bn. On the other hand, loan book improved by 9.5% YoY and 4.5% QoQ led...

Loan growth picked up marginally to 9.5% YoY, driven by 21.7% YoY growth in retail, while deposits growth was relatively muted at 2.5% YoY, leading to the CD ratio increasing to 72.2% (67.5%/71.7% in 2QFY17/1QFY18). Gross slippages declined sharply (40% QoQ) to INR33.7b, driven by controlled slippages in agri/MSME (INR3b/8b). Absolute GNPA increased 4% QoQ to INR392b, while GNPA/NNPA stood at 10.51%/7.02% (-5bp/-7bp QoQ). Total stressed book stood at 13.4% of advances (13.8% in 1Q). Other highlights: (a) The bank is in discussions to raise total capital of INR63b...

Canara Bank (CBK)'s Q1FY18 PAT grew by 10% YoY at Rs 2.5 bn aided by 18% YoY growth in NII. Provisions continue to stay elevated, though it declined by 19% QoQ, and remains a concern. Headline GNPA ratio increased by 93 bps QoQ to 10.6%, as slippages rose sharply to Rs 55.1 bn (vs. Rs 31 bn in Q4 ..

Canara Bank Q1FY18 results comment NII rose to Rs. 2713.24 Cr in Q1FY18 compared to Rs. 2708.22 Cr in Q4FY17.

The Government of India is mulling consolidation in the public sector banking space and Canara Bank is expected to one of the anchor bank/acquiring bank. This creates very high level of uncertainty for its future earning trajectory as balance sheet quality of several smaller public sector banks is considered to be pathetic. Further, we expect the Bank will continue to witness elevated level of credit cost, which will keep its earnings and return ratios subdued over next 6-8 quarters. We have cut our PAT and adjusted book value estimates for FY19E by 21.2% and 9.1%, respectively due to sharp QoQ rise in net NPA (+12.2% QoQ) and rise in credit cost guidance. We reiterate our HOLD recommendation on the stock with a downwardly revised...

NII rose to Rs. 2708.22 Cr in Q4FY17 compared to Rs. 2413.8 Cr in Q3FY17.

Canara Bank (CBK) reported a weak set of numbers (Q4 PAT of Rs 2.1 bn, down 33% QoQ) despite ~Rs 7 bn profit from stake sale in CanFin Homes (high trading profits at Rs 11.3 bn).

Following an impressive 45% upsurge in last 4 months, we believe that the current stock price has incorporated most of the near-term positives. Further, we expect the Bank will continue to witness elevated level of credit cost, which will keep its earnings and return ratios subdued over next 3-6 quarters. Rolling over our estimates to FY19E, we change our recommendation on the stock to HOLD from BUY with an upwardly revised Target Price of Rs384 (from Rs360...

Can Fin Homes Ltd (Can Fin) is a south based (74% of business) housing finance company with 43.53% shareholdings owned by Canara Bank. Can Fin has maintained a low-risk profile loan book, predominantly focused on salaried class. We expect Can Fin to deliver RoE of more than 20% on a sustained basis from FY2017 onwards (FY2017-23.6%, FY201..