CANARA BANK 2023-24 Annual Report Analysis

Mon, 3 Jun

CANARA BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

CANARA BANK Income Statement Analysis

• Interest income during the year rose 28.7% on a year-on-year (YoY) basis.
• Interest expenses were up by 36.1% YoY during the same period.
• Operating expenses increased by 23.4% YoY during the year.
• The bank's net interest income (NII) increased by 16.7% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 2.9% in FY24 as against 2.8% in FY23.
• Other income increased by 13.1% YoY during the year.
• Net profit for the year increased by 35.8% YoY.
• Net profit margins during the year increased to 13.8% in FY24 from 13.1% in FY23.

CANARA BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	858,847	1,105,188	28.7%
Other Income	Rs m	253,250	286,462	13.1%
Interest Expense	Rs m	529,901	721,176	36.1%
Net Interest Income	Rs m	328,947	384,012	16.7%
Operating Expense	Rs m	302,454	373,369	23.4%
Pre-provision Operating Profit	Rs m	279,743	297,105	6.2%
Provisions & Contingencies	Rs m	171,665	149,281	-13.0%
Profit before tax	Rs m	144,267	199,996	38.6%
Tax	Rs m	36,189	52,172	44.2%
Profit after tax	Rs m	112,547	152,786	35.8%
Minority Interest	Rs m	-898	-1,224	-36.2%
Net Interest Margin	%	2.8	2.9
Net profit margin	%	13.1	13.8

Don't Miss: Key Information for Long-term Investors

CANARA BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 13,122.4 bn as compared to Rs 11,790.9 bn in FY23, thereby witnessing an increase of 11.3%.
• Advances for the year stood at Rs 9,317.9 bn as compared to Rs 8,309.3 bn during FY23, a rise of 12.1%.
• Cost of deposits for CANARA BANK rose 22.0% and stood at 5.1%, while yield on advances rose to 8.4%.
• The lender's investments rose to Rs 3,992.1 bn during the year from Rs 3,528.9 bn in FY23.
• Borrowing stood at Rs 575.4 bn, a fall of 0.9% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 15,350.2 bn as against Rs 13,810.3 bn during FY23, thereby witnessing a rise of 11.2%.

CANARA BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	780,538	921,332	18.0%
Advances	Rs m	8,309,292	9,317,866	12.1%
Deposits	Rs m	11,790,865	13,122,425	11.3%
Yield on advances	%	7.4	8.4
Cost of Deposits	%	4.1	5.1
Investments	Rs m	3,528,927	3,992,070	13.1%
Borrowings	Rs m	580,732	575,376	-0.9%
Total Assets	Rs m	13,810,296	15,350,176	11.2%

Current Valuations for CANARA BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 84.2, an improvement from the EPS of Rs 62.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 123.3, stands at 1.1 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.2 times, while the price to income ratio stands at 0.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	473.4	609.2
Earnings per share (Unadj.)	Rs	62.0	84.2
Diluted earnings per share	Rs	12.4	16.8
Avg P/E ratio	Rs	4.1	1.1
Avg P/ABV ratio	Rs	0.7	1.2
Avg Market Cap	Rs	465,597	160,986
Dividends per share (Unadj.)	Rs	2.40	3.22

Ratio Analysis for CANARA BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 71.0x during FY24, from 70.5x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 14.87x during FY24, from 15.85x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): CANARA BANK's capital adequacy ratio (CAR) was at 16.3% as on 31 March 2024 as compared to 16.7% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 16.6% during FY24, from 14.4% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.00% during FY24, from 0.81% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 18.08% during FY24, from 14.75% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. CANARA BANK's gross NPA ratio stood at 4.2% as of 31 March 2024 compared to 5.4% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of CANARA BANK was 1.3% in financial year 2024. This compared with 1.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	70.5	71.0
Debt to Equity Ratio	x	15.9	14.9
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	16.7	16.3
Return on Equity	%	14.4	16.6
Return on Assets	%	0.8	1.0
Return on Capital Employed	%	14.8	18.1
% of Gross NPAs	%	5.4	4.2
% of Net NPAs	%	1.7	1.3
Yield on Advances	x	7.4	8.4
Yield on Investments	x	6.4	6.6

To see how CANARA BANK has performed over the last 5 years, please visit here.

CANARA BANK Share Price Performance

Over the last one year, CANARA BANK share price has moved up from Rs 62.7 to Rs 123.3, registering a gain of Rs 60.5 or around 96.5%.

Meanwhile, the S&P BSE BANKEX is trading at 57,309.5 (up 2.8%). Over the last one year it has moved up from 49,789.9 to 57,309.5, registering a gain of 7,519.6 points (up 15.1%).

Overall, the S&P BSE SENSEX is up 20.4% over the year.

(To know more, you can check out historical annual results for CANARA BANK here and quarterly results for CANARA BANK here)