Canara Bank shares shed 2% after disappointing Q1 earnings

Shares of PSU bank Canara Bank eased from its early highs, as investors steadily exited after the bank’s disappointing earnings which saw it post a steep 40.7 percent fall in the first-quarter net profit. [caption id=“attachment_2380058” align=“alignleft” width=“380”]  Canara Bank reports a 40.7 percent drop in first quarter net profit at Rs 478.84 crore[/caption] At 3 pm, shares of Canara Bank were traded at Rs 303.50, down 1.9 percent from the previous close. Earlier, in tandem with positive broad market sentiment the stock had risen 1.6 percent before erasing its gains on weak numbers. Over 7 lakh shares changed hands on the BSE so far as against two-week average volume of 2.50 lakh shares. However, in the last five sessions, the Canara Bank stock vaulted nearly 19 percent from a low of Rs 260 touched on July 28. Several PSU bank shares had attracted significant buying support in recent sessions after earnings in select lending firms showed signs of improving asset quality while hinting at reduction in NPAs in the next few quarters. The public sector lender reported a huge 40.7 percent fall in net profit in the first quarter ended June 30 at Rs 478.84 crore, mainly on the back of increase in provisions. Besides, slowdown in net interest income and subdued other income also impacted the overall profitability. Net interest income rose 3.6 percent to Rs 2,517 crore in the June quarter compared with Rs 2,429 crore in same quarter last fiscal. Other income (non-interest income) increased 8.4 percent year-on-year to Rs 1,113 crore while operating profit jumped 11.6 percent to Rs 2,003.6 crore during the quarter. Provisions for bad loans shot up 72.5 percent to Rs 1,359.7 crore compared with Rs 788 crore in the year-ago period.