November 1, 2018 / 4:07 AM / 3 months ago

BUZZ-India's Canara Bank slips as Q2 results disappoint

** Canara Bank Ltd shares fall as much as 2.9 pct to 254.25 rupees

** The state-run lender posted a 15.1 pct rise in Q2 net profit on Wednesday, helped by a tax write-back and marginal improvement in asset quality

** The bank would have reported a loss without the tax gain

** Provisions for the qtr surged 31.5 pct to 28.35 bln rupees, as the lender set aside more funds for bad loans

** Canara Bank’s Q2 “was good on pre-provision operating profit (PPoP) growth and asset quality trends. Still, we see better risk-reward at large peer corporate lenders given better starting points on PPoP margins, growth and capital,” Morgan Stanley says in a note

** While the bank’s non-performing loans appear to have peaked, low coverage will keep credit costs elevated, and a low CASA will be a headwind for net interest margins as interest rates rise - Deutsche Bank

** Stock down 27.3 pct this year as of last close

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