Earnings Review
Healthy treasury income lifts Canara Bank profit up 33% YoY
This story was originally published at 15:18 IST on 8 May 2025
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--Canara Bank Jan-Mar net profit INR 50.03 bln
--Analysts saw Canara Bank Jan-Mar net profit INR 42.22 bln
--Canara Bank Jan-Mar net profit INR 50.03 bln vs INR 37.57 bln year ago
--Canara Bank gross NPA ratio 2.94% as on Mar 31 vs 3.34% qtr ago
--Canara Bank Jan-Mar total income INR 373.53 bln vs INR 340.25 bln year ago
--Canara Bank net NPA ratio 0.70% as on Mar 31 vs 0.89% qtr ago
--Canara Bank to pay INR 4 per share dividend
--Canara Bank Basel III capital adequacy ratio 16.33% as on Mar 31
--Canara Bank Jan-Mar provisions INR 18.32 bln vs INR 24.82 bln year ago
--Canara Bank Jan-Mar NPA provisions INR 28.47 bln vs INR 22.80 bln year ago
--Canara Bank provision coverage ratio 92.70% as on Mar 31
--Canara Bank FY25 net profit INR 170.27 bln vs INR 145.54 bln year ago
--Canara Bank FY25 total income INR 1.42 tln vs INR 1.28 tln year ago
--Canara Bank shares recover, now up 2.3% vs down 0.6% earlier
--Canara Bank shares recover; Jan-Mar net profit beats estimates
--Canara Bank shares at INR 96.68, up INR 3.01 or 3.2%
--Canara Bank Jan-Mar net interest income INR 94.42 bln, down 1.4% year ago
--Canara Bank Jan-Mar net interest margin 2.73% vs 2.71% quarter ago
--Canara Bank Jan-Mar credit cost 0.92% vs 0.89% in Oct-Dec
--Canara Bank Jan-Mar fresh slippages INR 26.55 bln vs INR 23.63 bln qtr ago
--Canara Bank global deposits INR 14.57 tln as on Mar 31, up 11.01% YoY
--Canara Bank global gross advances INR 10.73 tln Mar 31, up 11.74% YoY
--Canara Bank global credit-deposit ratio at 73.67% as on Mar 31
By Priyasmita Dutta
NEW DELHI – A sharp jump in other income helped Canara Bank make healthy profits in the March quarter, beating Street estimates. The public sector bank posted a net profit of INR 50.03 billion for the March quarter, up over 33% on year. Sequentially, the net profit was up 22%. The bank's other income for the quarter rose over 22% to INR 63.51 billion, led by treasury income of INR 30.48 billion, more than double the year-ago figure.
Analysts estimates were much more muted. According to estimates from five brokerages, the bank's net profit for the quarter was seen at INR 42.22 billion, up 12% on year and 2.9% on quarter. Shares of the bank rose after it detailed the earnings on Thursday. At 1515 IST, its shares were at INR 95.47 on the National Stock Exchange, up nearly 2% from the previous close. The board of Canara Bank announced a dividend of INR 4 per share for 2024-25 (Apr-Mar).
The bank's total income for Jan-Mar rose 9.8% on year to INR 373.53 billion. Sequentially, it was up 3.4%. For FY25, the state-owned bank's net profit rose over 17% to INR 170.27 billion and total income increased over 11% to INR 1.42 trillion.
Treasury income was a saving grace for Canara Bank especially as its net interest income fell 1.4% on year to INR 94.42 billion during the quarter. However, it was above analysts' expectation of INR 92.71 billion. The net interest margin of the bank went up slightly to 2.73% in Jan-Mar from 2.71% a quarter ago, but was lower than the 3.07% in the corresponding quarter a year ago. For FY26, the state-owned bank has projected its net interest margin to be in the range of 2.75-2.80%.
The bank's business performance was steady, beating the guidance for FY25, with global advances and global deposits rising nearly 12% and over 11%, respectively, to INR 10.73 trillion and INR 14.57 trillion as of Mar. 31. The bank expects global advances to rise 10-11% in FY26 and global deposits to rise 9-10%.
Within global advances, the gross domestic advances were up over 11% on year at INR 10.09 trillion as of Mar. 31 and the international gross advances rose over 23% on year to INR 647 billion. Retail advances rose sharply by 43% on year to 2.23 trillion at the end of March.
Of the global deposits, domestic deposits were up 9.6% on year at INR 13.31 trillion and international deposits were up over 29% on year at INR 1.26 trillion. The domestic current account savings account deposits ratio was 31.17% at the end of March, lower than the guidance of 33%. For FY26, the bank has projected current account savings account deposits ratio at 32%. In Jan-Mar, the cost of deposits was 5.74%, higher than 5.72% a quarter ago and 5.50% a year ago.
Canara Bank's Jan-Mar cost-to-income ratio went down to 47.55% from 50.08% a year ago and 47.58% a quarter ago. The capital adequacy ratio based on Basel III norms was 16.33% at the end of March, as against 16.28% a year ago.
Beyond robust treasury income, the bank's lower provisioning during the March quarter also aided the profit. Provisions during Jan-Mar were down more than 26% on year to INR 18.32 billion. The net non-performing assets ratio fell 70 basis points on year to 0.70% end of March, while gross non-performing assets ratio fell 129 bps to 2.94%. Both the ratios were better than the guidance of 1.10% and 3.5% for March end. Canara Bank sees its net NPA at 0.60% end of March 2026 and gross NPA at 2.50%. The bank's provision coverage ratio rose 360 bps on year 92.70% as of Mar. 31, higher than the guidance of 90%. At the end of FY26, the bank sees the provision coverage ratio at 93%.
In Jan-Mar, Canara Bank's slippage ratio was 0.90%, 38 bps lower from the March quarter of FY24. The credit cost was 0.92% in Jan-Mar, 3 bps higher from Oct-Dec but 4 bps lower from Jan-Mar last year. The bank reported fresh slippages of INR 26.55 billion in the reporting quarter, while upgrades in the same duration were to the tune of INR 4.20 billion as against INR 4.60 billion a quarter ago and INR 5.20 billion a year ago. In the March quarter, Canara Bank wrote-off loans worth INR 50.22 billion, as against INR 38.96 billion written off in December quarter and INR 30.68 billion a year ago. End
Edited by Ashish Shirke
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