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Informist, Thursday, Oct. 30, 2025

--Canara Bank: Aim for MSME loan growth to be 15% or more by FY26-end 

--CONTEXT: Canara Bank mgmt's comments at post-earnings call with analysts 

--Canara Bank: No communication from govt on mergers, acquisitions 

By Kabir Sharma and Ashutosh Pati

MUMBAI – Canara Bank aims to imporove the growth in loans to the medium, small, and micro enterprises sector by 15% on year by the end of the current financial year, Managing Director K. Satyanarayana Raju said in a post earnings call with analysts on Thursday. For the Jul-Sept quarter, loans to MSMEs grew 12.7% on year, the investor presentation showed. 

Loans to retail, agriculture, and MSMEs will grow faster than the corporate book of the bank, Raju said. "...let me say that our RAM (retail, agriculture, and MSME) sector will grow much faster than the corporate sector because it's a strategy that we should reach our RAM sector to 60% and the corporate sector to 40%. That is the ratio we want to reach in next one or one and a half year time. So our trust will continue to be in the RAM sector to grow faster than the corporate credit," Raju said. 

The bank also does not see a further dip in net interest margins, Raju said. "There won't be any further dip in those areas. "It will be maintained at 2.5% or 2.5% and above. But fourth quarter onwards, definitely again we look forward for pick up in this NIM. We will regain our NIMS back to 2.9% or 3% if the market conditions are continued and if there are no further rate cuts," he said.

The lender's net interest margin contracted in the September quarter, primarily due to the Reserve Bank of India's Monetary Policy Committee cutting the repo rate by 100 bps so far in 2025. The bank's net interest margin was 2.50% in the September quarter, down from 2.55% a quarter ago and 2.86% a year ago. The bank has guided for its global annualised net interest margin at 2.75-2.80% for FY26.

The bank aims to recover INR 17 billion-INR 18 billion from written-off accounts in Oct-Dec and subsequent quarters, Raju said. Raju also clarified that so far there is no communication from the Department of Financial Services, Ministry of Finance, on the merger of the bank with other public sector banks. The bank recovered INR 19.75 billion in the reporting quarter. 

The public-sector bank's net profit for Jul-Sept was INR 47.74 billion, up 19% on year and higher than analysts' estimate of INR 41.56 billion. The net profit was up only 0.5% on quarter. The lender's shares ended 3.2% higher at INR 138.89 on the National Stock Exchange.  End

Edited by Akul Nishant Akhoury

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