Higher trading profit and better cash recoveries helped Canara Bank log a 60 per cent jump in net profit in the third quarter ended December 31, 2014. The Bengaluru-headquartered public sector bank reported a net profit of ₹656 crore as against ₹409 crore in the year-ago period.

Net interest income (the difference between interest earned and expended) climbed 7 per cent at ₹2,380 crore (₹2,227 crore in the year-ago period).

Non-interest income, comprising commission and exchange, profit from foreign exchange transactions, and trading profit, rose 38 per cent to ₹1,176 crore (₹851 crore). Trading profit soared to ₹301 crore (₹76 crore).

Cash recoveries, including in written-off accounts, in the reporting quarter was higher at ₹4,427 crore (₹3,135 crore).

Restructured loans Slippages (fresh accretion to bad loans) during the quarter amounted to ₹2,292 crore (₹2,100 crore). The bank restructured loans amounting to ₹1,095 crore (₹3,454 crore)

PS Rawat, Executive Director, said bad loans have more-or-less peaked.

Provision towards bad loans jumped to ₹912 crore (₹543 crore).

VS Krishna Kumar, MD and CEO, said the pipeline of restructured loans in the current quarter is around ₹1,200 crore.

Withdrawal of the special asset classification benefit for restructured accounts for banks from April 1, 2015, will not have much impact on the bank, he added.

Global net interest margin (net interest income/ total assets) improved to 2.24 per cent (2.21 per cent).

Capital mop-up On capital raising plans, Krishna Kumar said depending on the market conditions his bank plans to mop up about ₹3,000 crore via qualified institutional placement and additional tier-I capital in the current quarter.

The bank is already in the market to raise additional Tier- I capital amounting to ₹1,500 crore through issue of Basel-III complaint additional Tier-I perpetual bonds through private placement.

Shares of Canara Bank ended at ₹453 apiece, up 3.25 per cent on the BSE.

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