The State-run lender Canara Bank on Thursday reported a net profit of Rs. 1,053 crore for the December quarter, recording a robust 50 per cent jump over Rs. 702 crore it netted in the same quarter previous fiscal.

Total income rose to Rs. 5,469 crore, including Rs. 3,471 crore interest income from loans and advances, while non-interest income rose to Rs. 781 crore.

Explaining the reason for the spurt in net profit, Canara Bank Chairman and Managing Director A.C. Mahajan said here today that, “There were multiple causes for the increase in profit. Net interest income has gone up. Cost of deposit has come down and there has been no increase in operating cost. Demand for credit has also gone up.”

“We have ensured adequate provision even for wage settlement so there would be no pressure on last quarter profitability,” Mahajan said.

Net interest income recorded a 18.8 percent rise to reach Rs. 1,478 core compared to Rs. 1,244 crore in the same quarter last fiscal. Net interest margin (NIM) was sustained at 2.71 percent while operating expenses were contained at almost the third quarter last fiscal level.

The total provisioning was at Rs. 417 crore. The bank has ensured a provision coverage ratio at 74.04 percent, well above the RBI stipulated norm of 70 per cent, he said.

The bank’s gross NPA ratio stood at 1.77 per cent at Rs. 2,619 crore while its net NPA ratio was at 1.34 per cent at Rs. 1,976 crore as of December 2009. Cash recovery for nine months period improved to Rs. 896 crore compared to Rs. 836 crore during the corresponding figure last fiscal.

Total expenses declined by 4.1 per cent to Rs. 3,999 crore.

Advances to priority sector recorded a growth of 19.4 per cent to reach Rs. 54,893 crore, accounting for 40.65 per cent of the adjusted net bank credit. Credit to agriculture grew by 21 per cent to touch Rs. 22,880 crore. Bank’s MSME credit grew by a robust 32.6 per cent to reach Rs. 28,427 crore.

Aggregate business mix reached Rs. 3,56,310 crore, up by 17.3 per cent year-on-year. While aggregate deposits reached Rs. 2,08,899 crore with a growth of 19.5 per cent, net advances rose to Rs. 1,47,411 crore, up by 14.3 per cent.

The credit to deposit ratio stood at 70.57 per cent.

“The cherry on the cake was educational loans,” Mahajan said. The bank’s educational loan portfolio increased to Rs. 2,791 crore in the third quarter registering a year-on-year growth of 28 per cent, covering 1.65 lakh students.

For nine-month ended December 2009, net profit moved up to Rs. 2,518 crore, up by 86 per cent year-on-year growth while total income increased by 15.6 per cent to reach Rs. 16 103 crore.

For fiscal 2010, Mahajan said the bank aims to reach an aggregate business figure of Rs. four lakh crore.

When asked whether the target would be achieved, he said “The task is difficult but our determination strong“.

The bank’s branch network crossed 3,000 in December 2009.