Earnings Review
Canara Bank PAT up 22% as treasury income jumps fourfold
This story was originally published at 15:21 IST on 24 July 2025
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--Canara Bank Apr-Jun net profit INR 47.52 bln
--Analysts saw Canara Bank Apr-Jun net profit at INR 41.72 bln
--Canara Bank Apr-Jun net profit INR 47.52 bln vs INR 39.05 bln year ago
--Canara Bank Apr-Jun total income INR 380.63 bln vs INR 340.20 bln year ago
--Canara Bank Apr-Jun provisions INR 23.52 bln vs INR 22.82 bln year ago
--Canara Bank Apr-Jun NPA provisions INR 18.45 bln vs INR 21.71 bln year ago
--Canara Bank gross NPA ratio 2.69% as on Jun 30 vs 2.94% qtr ago
--Canara Bank net NPA ratio 0.63% as on Jun 30 vs 0.70% qtr ago
--Canara Bank Basel III capital adequacy ratio 16.52% as on Jun 30
--Canara Bank provision coverage ratio 93.17% as on Jun 30
--Canara Bk: Hold additional provision INR 4.12 bln in 9 accounts on Jun 30
--Canara Bank global deposits INR 14.677 tln as on Jun 30, up 9.92% YoY
--Canara Bank global advances INR 10.963 tln as on Jun 30, up 12.42% YoY
--Canara Bank global credit-deposit ratio at 74.70% as on Jun 30
--Canara Bank Apr-Jun net interest income INR 90.09 bln, down 1.7% on year
--Canara Bank Apr-Jun net interest margin 2.55% vs 2.90% year ago
--Canara Bank Apr-Jun credit cost 0.72% vs 0.92% qtr ago
--Canara Bank Apr-Jun fresh slippages INR 21.29 bln vs INR 26.55 bln qtr ago
--Canara Bank Apr-Jun write-offs INR 31.15 bln vs INR 50.22 bln qtr ago
--Canara Bank: Annualised global NIM seen at 2.75-2.80% as on Mar 31
--Canara Bank: Global gross NPA ratio seen at 2.50% as on Mar 31
--Canara Bank: Global net NPA ratio seen at 0.60% as on Mar 31
--Canara Bank: Domestic CASA ratio seen at 32% as on Mar 31
By Priyasmita Dutta
NEW DELHI – A fourfold rise in treasury income helped Canara Bank report a healthy profit for the June quarter, beating Street estimates. The public sector bank posted a net profit of INR 47.52 billion for the quarter, up nearly 22% on year. The bank's treasury income for the quarter totalled INR 19.93 billion, compared with INR 5.03 billion a year ago.
Analysts had expected the state-owned bank to post a net profit of INR 42.47 billion in the quarter under review.
Sequentially, however, the net profit was down 5% due to a one-time profit in the March quarter from reversal of provision relating to security receipts issued by National Asset Reconstruction Co. Ltd. amounting INR 5 billion. The bank released its financial results during market hours. At 1338 IST, shares of the bank were at INR 112 on the National Stock Exchange, up 4% from Wednesday's close.
The bank's total income during the June quarter rose 12% on year to INR 380.63 billion. Sequentially, it was up 2%.
Treasury income was a saving grace for Canara Bank especially as its net interest income fell 1.7% on year to INR 90.09 billion during the quarter. The net interest income was also below analysts' expectation of INR 91.90 billion. The net interest margin of the bank was down 18 basis points sequentially at 2.55% during Apr-Jun, and 35 bps lower than the year ago figure. In the previous quarter, the bank had projected its net interest margin in the range of 2.75-2.80% in FY26.
The bank's business performance was steady, in line with the guidance for FY26. Its global advances and global deposits rose over 12% and nearly 10%, respectively, to INR 10.96 trillion and INR 14.68 trillion as of Jun. 30. The bank expects global advances to rise 10-11% on year by the end of FY26 and global deposits to rise 9-10%.
Within advances, the gross domestic advances were up over 12% on year at INR 10.32 trillion as of Jun. 30 and the international gross advances rose 17% on year to INR 642 billion. Retail advances rose robustly by 34% on year to 2.35 trillion at the end of June.
Of the deposits, domestic deposits were up 8.7% on year at INR 13.39 trillion and international deposits were up nearly 24% on year at INR 1.29 trillion. The domestic current account savings account deposits ratio was 29.56% at the end of June. In Apr-Jun, the cost of deposits was flat sequentially at 5.74%, but 4 basis points higher than 5.70% a year ago.
Canara Bank's Apr-Jun cost-to-income ratio went down to 46.77% from 47.42% a year ago and 47.55% a quarter ago. The capital adequacy ratio based on Basel III norms was 16.52% at the end of June, higher than 16.33% end of March and 16.38% end of June 2024.
Beyond robust treasury income, the bank's lower provisioning for bad loans during the June quarter also aided the profit, even though total provisions went up 3%. Total provisions of INR 23.52 billion during Apr-Jun was 28% higher sequentially. Provisions for bad loans totalled INR 18.45 billion during the June quarter, 15% lower on year and 35% lower from the trailing quarter, as asset quality improved. The bank, however, held additional provisions worth INR 4.12 billion for nine accounts.
The net non-performing assets ratio fell 7 bps sequentially to 0.63% end of June, while gross non-performing assets ratio fell 25 bps to 2.69%. On a year-on-year basis, the net NPA fell 61 bps and gross NPA fell 145 bps. The bank's provision coverage ratio rose 395 bps on year to 93.17% as of Jun. 30.
In Apr-Jun, Canara Bank's slippage ratio was 0.80%, 52 bps lower from the June quarter of FY25. The credit cost was 0.72% in Apr-Jun, 20 bps lower from Jan-Mar and 18 bps lower from Apr-Jun last year. The bank reported fresh slippages of INR 21.29 billion in the reporting quarter, while upgrades in the same duration were to the tune of INR 5.58 billion as against INR 4.20 billion a quarter ago and INR 4.95 billion a year ago. In the June quarter, Canara Bank wrote off loans worth INR 31.15 billion, lower than the INR 50.22 billion written off in the March quarter but higher than INR 23.11 billion a year ago. End
Edited by Avishek Dutta and Akul Nishant Akhoury
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