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Canara Bank expects to beat FY27 guidance as loan growth and asset quality improve

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Canara Bank expects to beat FY27 guidance as loan growth and asset quality improve

Canara Bank expects to beat FY27 guidance as loan growth and asset quality improve

The bank expects to maintain its net interest margin at around 2.55%, supported by loan repricing and strong retail lending margins. About 53% of its loan book has already been repriced, while replacing higher-cost bulk deposits with FCNR(B) deposits has helped reduce funding costs.

Canara Bank’s advances grew 20.4% year on year, while deposits rose 13%, pushing the global credit-deposit ratio up 485 basis points to 80.2%. Net profit increased 8% as net interest income grew 20% and lower provisions offset an 87% decline in profit on sale of investments. Gross and net NPA ratios improved to 1.33% and 0.30%, respectively, while the bank plans to phase its estimated Rs 12,000-15,000 crore ECL provision requirement over about two years. JM Financial upgraded the stock to Buy and raised its target price to Rs 150 from Rs 142, citing improving fundamentals and attractive valuations.

Canara Bank expects to outperform most of its FY27 business targets as strong loan growth, stable margins and improving asset quality support performance, without formally revising its existing guidance. 50%. The bank’s net interest income rose 20% year on year and 8% sequentially, helping net profit increase 8% to Rs 5,175 crore despite an 87% decline in profit on sale of investments. 55%, while lower provisions also supported earnings, according to JM Financial.



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