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Informist, Thursday, Jan. 29, 2026

 

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--Canara Bank: See cost of deposits cooling down further 
--CONTEXT: Comments from Canara Bank in analyst call post Q3 earnings 
--Canara Bank: Expect NIM to stabilise Q4 given a rate cut does not happen 
--Canara Bank: See no reason to entertain low yielding advances 
--Canara Bank: Protecting net interest margin remains major priority 
--Canara Bank: Recoveries to continue at current level in FY27 
--Canara Bank: Aim for deposits to grow at 9-10% going ahead 
--Canara Bank: Expect no impact from RBI's expected credit loss norms 
 

 

By J. Navya Sruthi and Kabir Sharma

 

MUMBAI – Canara Bank will continue to prioritise protecting its net interest margin and expects it to stabilise in the current quarter, the public-sector bank's management told analysts in a post-earnings conference call. The management expects to see firm growth in loans to the retail, agriculture, and micro, small, and medium enterprise sectors, which will support its net interest margin. 

 

"We will retain this margin with the same momentum going ahead in the CASA (current account savings account ratio) and RAM (retail, agriculture, and micro, small, and medium enterprise sectors) growth. So, even if further reduction in repo (rate) happens, we presume that our NIM will be in the range of 2.45-2.50%," the management said. According to the bank's investor presentation, the guidance for the net interest margin for the financial year 2025-26 (Apr-Mar) is unchanged at 2.75-2.80%.

 

The bank's net interest margin for the December quarter was 2.45%, contracting from 2.71% a year ago and 2.50% in the trailing quarter. The bank's net interest margin is lower than that of its peers in the industry.

 

The management said the net interest margin will stabilise going forward if there is no rate cut by the Reserve Bank of India at the upcoming February meeting of the Monetary Policy Committee. This is likely because the cost of deposits is expected to fall further with the RBI infusing liquidity in the system through open market operation and dollar-rupee buy/sell swap auctions, it said.

 

The bank's cost of deposits in the December quarter was 5.62%, down from 5.70% a year ago and 5.66% a quarter ago. The management expects the bank's deposits to grow at 9-10% in upcoming quarters. The bank's domestic deposits rose 11% on year to nearly INR 14 trillion in the December quarter.

 

The state-owned bank, which reported a total income of INR 398.81 billion and a net profit of INR 51.55 billion for the December quarter, does not see any impact from the RBI's expected credit loss norms. "The release of funds that has happened on account of the CRR (cash reserve ratio) cut over September and November, that itself has cushioned all that," the management said.

 

The management also said recoveries will continue at the current pace in FY27 and it sees no reason to entertain low-yielding advances. Shares of the bank ended nearly 5% lower Thursday at INR 150.32 on the National stock Exchange.  End

 

Edited by Rajeev Pai

 

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