Canara Bank — Q2 FY26 earnings call

Call held 30 Oct 2025

Management summary

Canara Bank delivered an exceptional Q2 FY26 performance with record operating profits and robust growth across all segments. The bank achieved 11 out of 13 guidance parameters, with strong momentum in retail and MSME lending. Asset quality continued improving with significant NPA reduction and high provision coverage.

Highlights

  • All-time high Operating Profit of ₹8,588 crore (+12.20% YoY)

  • Net Profit of ₹4,774 crore (+18.93% YoY)

  • Global Business growth of 13.55% to ₹26,78,963 crore

  • Gross NPA improved to 2.35% (down 138 bps YoY)

  • PCR strengthened to 93.59% (+270 bps YoY)

  • RAM credit grew 17% with Retail advancing 29.11%

  • MSME growth above 12% for first time in 5-6 years

  • Expected ₹1,935 crore one-time gain from subsidiary stake sales in Q3

Key financials

  1. Global Business ₹26.79L Cr +13.6%YoY
  2. Global Deposits ₹15.27L Cr +13.4%YoY
  3. Global Advances ₹11.51L Cr +13.7%YoY
  4. Operating Profit ₹8,588 Cr +12.2%YoY
  5. Net Profit ₹4,774 Cr +18.9%YoY
  6. RAM Credit ₹6.71L Cr +17%YoY
  7. Retail Credit ₹2.51L Cr +29.1%YoY
  8. MSME Credit ₹1.54L Cr +12.7%YoY
  9. Housing Loan ₹1.14L Cr +15.3%YoY
  10. Vehicle Loan ₹23,367 Cr +25.6%YoY

What they filed

Q1 FY27: revenue up 4.5%, net profit up 60.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue30,182 30,751 31,496 31,523 32,072 +6%30,938 +1%31,839 +1%32,957 +5%
Net profit4,227 4,256 5,111 3,233 4,896 +16%5,174 +22%4,575 −10%5,182 +60%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Overall Guidance

  • 13 Parameters Achievement Overall Guidance · FY26 · High confidence 11 out of 13 achieved
    In the year starting we have given some 13 parameters or guidance for this financial year. Out of those 13, 11 parameters we already achieved

    — MD & CEO

CASA Ratio

  • CASA Percentage CASA Ratio · March 2026 · Medium confidence 32%
    CASA, there is a positive growth from June quarter to this. We are at now 30.69% as against a guidance of 32% for March

    — MD & CEO

Business Mix

  • RAM:Corporate Ratio Business Mix · Next 1-1.5 years · High confidence 60:40
    our RAM sector will grow much faster than our corporate sector because it is a strategy that we should reach our RAM sector to 60% and corporate sector to 40%

    — MD & CEO

MSME Growth

  • MSME Credit Growth MSME Growth · End of FY26 · High confidence Above 15%
    MSME we are expecting that definitely by the end of the year we may end up at above 15% growth

    — MD & CEO

Net Profit

  • Annual Net Profit Net Profit · FY26 · High confidence Above ₹20,000 crores
    This year we are expecting that our Net Profits may cross ₹20,000 crores. Last year we were at ₹17,027 crores

    — MD & CEO

Risks & concerns

  • NIM Pressure from Rate Cuts

    medium

    NIMs under pressure due to 100 bps repo rate cut affecting 46% of loan book immediately while 90% deposits are 1-year tenure

    Acknowledged but temporary

  • CASA Growth Challenge

    medium

    Difficulty maintaining CASA percentage when balance sheet growing at 14% vs historical 5-6%

    Working hard with initiatives

  • ECL Implementation

    low

    Expected Credit Loss norms effective March 2027, but bank already creating buffers

    Well prepared

  • SMA Account Provisioning

    low

    ₹380 crore additional provision for Telangana drinking water project in SMA category

    Proactive provisioning

Q&A highlights

5 direct
Margin Outlook Direct
one more quarter it may continue to be stable, Madam. There afterwards, you can say there is some improvement may happen

Clear guidance on NIM stabilization timeline

Asked by Ms. Maru

ECL Guidelines Impact Direct
I do not think that will have so much impact on our either CRAR or on our Credit Cost

Management confident about minimal impact from new provisioning norms

Asked by Ms. Maru

One-time Gains Direct
we got benefit of almost ₹2,000 crores...we got benefit of ₹1,935 crores. These ₹1,935 crores, we have not booked so far anything in the previous quarter. The entire amount will be booked in this current quarter

Clarity on substantial Q3 one-time income from subsidiary listings

Asked by Anand Dama

Gold Loan Business Direct
in India, we are the number one banker, that I don't think any bank or the NBFCs near to us in the gold loan. Our gold loan portfolio is as on date, it has crossed two lakh eleven thousand crores

Strong positioning in profitable gold loan segment

Asked by Ramanuj

Digital Investments Direct
last four years continuously we have invested almost near to the thousand crores every year. So this year also, we have budgeted almost 600 crores

Continued focus on digital transformation

Asked by Sushil Choksi

1 min read 5 chapters

Detailed narrative

Record Financial Performance

Canara Bank achieved its highest-ever half-yearly operating profit of ₹8,588 crore, marking a 12.20% YoY growth. Net profit surged 18.93% to ₹4,774 crore. The bank's global business expanded 13.55% to ₹26.79 lakh crore, with deposits growing 13.4% and advances 13.74%. Return on Assets improved to 1.12%, up 7 bps YoY.

Strong Asset Quality Improvement

Asset quality showed remarkable improvement with Gross NPA declining 138 bps YoY to 2.35% and Net NPA falling 45 bps to 0.54%. Provision Coverage Ratio strengthened significantly to 93.59% (+270 bps YoY). Credit cost decreased to 0.68% (-29 bps YoY). Slippage ratio improved to 0.76% (-24 bps YoY).

Retail and MSME Momentum

RAM credit demonstrated strong growth at 17% YoY to ₹6.71 lakh crore. Retail credit surged 29.11% to ₹2.51 lakh crore, with housing loans growing 15.25% and vehicle loans expanding 25.58%. MSME achieved above 12% growth for the first time in 5-6 years at 12.70% YoY growth.

Subsidiary Value Unlocking

The bank successfully listed two subsidiaries - Canara Robeco and Canara Life, generating ₹1,935 crore in gains to be booked in Q3. This represents significant value unlocking from subsidiary businesses and strengthens capital position.

Digital and Gold Loan Leadership

Continued investment in digital infrastructure with ₹600 crore budgeted for FY26. The bank maintains leadership in gold loans with ₹2.11 lakh crore portfolio, the largest among banks/NBFCs in India, offering attractive yields of 8.75-8.8% with minimal slippages.

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