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Informist, Thursday, May 8, 2025

--Canara Bank: Will try to invest more in non-SLR bonds 

--Canara Bank: Average LCR currently in the range of 139-140% 

--Canara Bank: Open to cutting deposit rates but will keep customers in mind 

--CONTEXT: Comments by Canara Bank mgmt in post-earnings call with analysts 

--Canara Bank: Want to have provision coverage ratio of near 95% 

By Kabir Sharma and Siddhi Chauhan

MUMBAI – Canara Bank is aiming to increase its investments in the non-statutory liquidity ratio bonds in 2025-26 (Apr-Mar), its management said on Thursday. "In this year also, we have tried to increase our non-SLR book, so I will book profits by transaction in that book. This year also we will try to repeat whatever we did because our non-SLR book historically has been very low," Executive Director Debashish Mukherjee said at a post-earnings analysts call.

"So that will be our strategy as well as last year we could churn our investment in the mutual funds and earn profit, this year also market supporting we will try to do that, so whatever extra you know profits we earn by way of treasury will be invested in these two portfolios and we will try to and also in the equity market," Mukherjee said. 

The bank will aim to maintain its net interest margin around the current level as the yield on advances is expected to ease going forward due to likely repo rate cuts by the Reserve Bank of India going forward. 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 3.07% a year ago. For FY26, the state-owned bank has projected a net interest margin in the range of 2.75-2.80%.

The bank is open to cutting deposit rates to protect the margins, but the bank will always keep the benefit of the customers as a priority, Managing Director and Chief Executive Officer K. Satyanarayana Raju said.

The bank is targeting a provision coverage ratio of 95% going forward, Raju said.  The bank's provision coverage ratio rose 360 basis points on year to 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%. "We want to strengthen our provision coverage ratio to make it at par with the other peer banks, because you know that we have been historically a little behind that in the PCR (provision coverage ratio), we don't want to continue like that," Raju said. 

Raju said the liquidity coverage ratio of the bank is currently around 139-140%. On Thursday, shares of Canara Bank ended at INR 95.37 on the National Stock Exchange, up 1.8% from the previous close.  End

Edited by Saji George Titus

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