State-run Canara Bank on Monday reported its fourth-quarter net profit rose 12 per cent from a year earlier, driving its shares higher in a subdued market.
Net profit in the January-March quarter rose to Rs 308 crore (Rs 3.08 billion) from Rs 275 crore (Rs 2.75 billion) a year earlier.
Net non-performing assets fell to 3.59 per cent of total loans at end-March from 3.89 percent, a bank statement said.
Its shares ended up 5.24 per cent at Rs 98.35 on the Bombay Stock Exchange, having earlier risen as much as 7.9 per cent to Rs 100.80 immediately after the results.
The exchange's benchmark index closed down 0.24 per cent.
The bank's capital adequacy ratio rose to 12.5 per cent at the end of March from 11.88 per cent a year earlier, it said.
Canara Bank chairman R V Shastri said the bank had set a business target of Rs 1,31,000 crore (Rs 1,310 billion) for 2003-04 with an estimated growth of 15.55 per cent, comprising Rs 82,000 crore (Rs 820 billion) under deposits and Rs 49,000 crore (Rs 490 billion) in advances.
"We hope to have an operating profit of over 20 per cent this year... and it will be driven by consolidating our treasury operations, foreign exchange, insurance and retail operations, besides a focus to garner low cost deposits," he said.
The bank has made a provision of Rs 978 crore (Rs 9.78 billion) including Rs 476 crore (Rs 4.76 billion) for non-performing assets in 2002-03, as against Rs 915 crore (Rs 9.15 billion) including Rs 386 crore (Rs 3.86 billion) for non-performing assets in 2001-02.
Shastri said the cost of deposits declined to 6.32 per cent from 7.16 per cent in 2002.
The Capital Adequacy Ratio stood at 12.50 per cent as against 11.88 per cent last year.
He said the bank would complete total computerisation of branches by March 2004.
"We do not intend to go for a VRS and the excess manpower would be deployed within the organisation. Three thousand people will join the sales and marketing team and 1,000 employees would join the recovery force," Shastri said.
He said the bank would launch a debit card in the next two months. Besides, the credit card division would be made into a profit centre.
Shastri said the bank anually invested Rs 100 crore (Rs 1 billion) in IT initiatives.
Additional inputs from PTI