Public sector lender Canara Bank has had to see a decline in its profits for the first quarter of this fiscal by as much as 28%. The net profit of the bank for this quarter stands at Rs 725.85 crore as compared to Rs 1,013.37 crore for the same period last year.

The decline in profits has been due to the increased provisioning for non performing assets (NPAs) as well as a dip in trading profits.

Provisioning for NPAs increased by Rs 285 crore. It was also increased by the automated NPA identification process adopted by the bank.

"There was also a reversal of interest of Rs 210 crore due to slippages as we shifted to system-based NPA identification of up to Rs 2 lakh. This is a one-off occurrence," Mr S. Raman, Chairman and Managing Director, Canara Bank said.

Though we were one of the last among public sector banks to go in for 100 per cent core banking solution, we went aggressively into system-driven NPA identification and recoveries. We made recoveries of Rs 750 crore in the NPA portfolio in the first quarter itself," said Mr Raman.