Canara Bank
Canara Bank
Financial Services F&OCanara Bank was merged with erstwhile Syndicate Bank in FY21. Canara was incorporated in 1906 and nationalised in 1969, along with 13 other major commercial banks of India, by the GoI. The bank is headquartered in Bangalore.Canara Bank was merged with erstwhile Syndicate Bank (e-SB) on April 1, 2020.
Canara Bank trades at an attractive PE of 6.2x and PB of 1.1x with a 3-year ROE of 17%, offering a compelling value proposition among PSU banks. The 3-year profit CAGR of 18% and strong analyst consensus (79% buy ratings) support a buy case, though contingent liabilities of Rs.6.05 lakh crore and slowing TTM profit growth of 2% warrant monitoring.
Key Fundamentals
LargecapPublic Sector BankBanksTechnical Indicators
Key Insights
Strengths
3- Stock is trading at 1.00 times its book value
- Stock is providing a good dividend yield of 3.23%.
- Company has been maintaining a healthy dividend payout of 20.4%
Weaknesses
4- Company has low interest coverage ratio.
- Contingent liabilities of Rs.6,04,935 Cr.
- Company might be capitalizing the interest cost
- Working capital days have increased from 268 days to 432 days
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 3d agoCanara Bank trades at an attractive PE of 6.2x and PB of 1.1x with a 3-year ROE of 17%, offering a compelling value proposition among PSU banks. The 3-year profit CAGR of 18% and strong analyst consensus (79% buy ratings) support a buy case, though contingent liabilities of Rs.6.05 lakh crore and slowing TTM profit growth of 2% warrant monitoring.
- Trades at PE of 6.2x, significantly below private sector bank peers and even below PSU bank averages, indicating deep value
- Price-to-book of 1.1x (near book value at 1.03x) offers margin of safety for a bank with 17% 3-year average ROE
- 5-year compounded profit CAGR of 44% demonstrates massive earnings recovery and turnaround execution
- Dividend yield of 3.11% with consistent 20.4% payout ratio provides income support while retaining capital for growth
- 79% of 19 analysts rate it a buy, with only 10.5% recommending sell, reflecting broad Street confidence
- Stock CAGR of 35% over 5 years and 31% over 3 years shows sustained re-rating momentum
- 3-year compounded sales growth of 14% indicates healthy loan book expansion and NII growth
- ROE improved from 11% (10-year average) to 16-17% (recent 3-5 years), showing structural profitability improvement
- Contingent liabilities of Rs.6,04,935 crore represent a massive off-balance-sheet risk relative to Rs.1.22 lakh crore market cap
- TTM profit growth has decelerated sharply to just 2%, down from 18% 3-year CAGR, signaling potential earnings plateau
- Low interest coverage ratio indicates vulnerability to rate cycle shifts and potential NIM compression
- Working capital days increased from 268 to 432 days, a 61% deterioration suggesting asset-liability management stress
- TTM sales growth of only 4% versus 14% 3-year CAGR shows significant topline deceleration
- Company may be capitalizing interest costs, potentially overstating asset quality and understating true expenses
- As a PSU bank, government ownership limits capital allocation flexibility and exposes to directed lending mandates
- 52-week high and low data unavailable, limiting technical risk assessment for near-term entry points
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 1d ago- RBI ₹41.8L penalty for KYC lapses Jun 06
RBI fined Canara Bank ₹41.80 lakh for failing to upload KYC details to CKYCR and incorrectly classifying active accounts as inoperative, based on ISE 2025 findings reviewing position as of March 31, 2025.
- Q4 net profit down 9.94% YoY Jun 02
Standalone net profit fell to ₹4,505.57 crore in Q4 FY26 from ₹5,002.66 crore a year ago, driven by contraction in non-interest income streams despite 4% YoY NII growth.
- ₹800 Cr mark-to-market treasury loss Jun 10
Bond yields moving from 6.59% to 7.05% and a 4,000 bps equity market correction caused an ₹800 crore MTM loss in Q4, contrasting with ₹1,930 crore listing gains in the prior quarter.
- CASA ratio lags private peers Jun 10
CASA ratio at 29.84% trails ICICI Bank (~39%) and HDFC Bank (~33-34%), resulting in higher funding costs. Reaching the 32% target would shift ₹22,000 crore from term to CASA deposits, saving ~₹880 crore annually.
- Stock down 16% year-to-date Jun 02
Canara Bank shares declined 16% YTD with market cap at ₹1.17 lakh crore as of June 2, 2026, reflecting broader PSU bank weakness and leadership transition uncertainty.
- RBI penalty for reporting delay Jun 06
RBI imposed a ₹2,49,658 penalty on Canara Bank for delayed reporting by its currency chest, with the order received on June 6, 2026.
- ₹8,500 Cr capital raising approved Jun 02
Board approved ₹4,500 crore in AT1 bonds and ₹4,000 crore in Tier II bonds for FY27 to strengthen capital adequacy and support credit growth across retail, corporate, and MSME segments.
- ₹303 Cr recovered from Rajesh Exports Jun 10
Canara Bank recovered ₹303 crore (59.5%) from its fully-provided ₹509 crore exposure to Rajesh Exports via DRT decree, enabling potential provision reversal and boosting the bottom line.
- Asset quality at multi-year best Jun 02
GNPA improved to 1.84% from 2.94% in Q4 FY25, Net NPA fell to 0.43%, and Provision Coverage Ratio stands at 94.21%, reflecting strong credit discipline.
- ₹4.2 per share dividend declared Jun 23
Canara Bank declared a final dividend of ₹4.2 per share for FY26 at its 24th AGM with June 12 as record date, rewarding shareholders from sustained profitability.
- New MD & CEO takes charge Jun 01
Brajesh Kumar Singh, with 30+ years of banking experience and previously ED at Indian Bank, assumed charge as MD & CEO effective June 1, 2026, with tenure until April 30, 2029.
- NII up 4%, cost of deposits down 8bps Jun 10
Net interest income grew to ₹9,809 crore in Q4, with cost of deposits falling 8 basis points saving ~₹700 crore, driven by a strategic shift from bulk to retail term deposits.
- RAM segment at 59%, yielding 8.88% Jun 10
RAM lending reached 59% of advances targeting 60-40 with corporate, delivering 138 bps spread advantage over corporate yields of ~7.5% plus 20-30 bps credit cost savings.
- ECLGS 5.0 risk-free lending opportunity Jun 10
With ECLGS 5.0 corpus at ₹2.55 lakh crore and 100% guarantee coverage, Canara Bank capturing 8-10% could generate ₹1,836-2,295 crore in annual interest income with zero credit risk.
- ₹20.8 Cr block trade on NSE Jun 17
Approximately 15.34 lakh shares changed hands at ₹135.53 per share in a ₹20.80 crore institutional block deal on NSE, indicating notable but non-disruptive institutional activity.
- ₹17.46 Cr block trade on NSE Jun 11
About 13.07 lakh shares traded at ₹133.58 per share totaling ₹17.46 crore in a block deal executed outside the regular order-matching mechanism.
- MCLR revised effective June 12 Jun 10
Overnight MCLR increased to 7.95% while the benchmark one-year MCLR remained unchanged at 8.75%, effective June 12, 2026.
- Special window for demat opened Jun 09
Canara Bank notified a special window for transfer and dematerialisation of physical securities following a SEBI circular dated January 30, 2026.
- Board to discuss capital plan May 26
Board meeting scheduled for June 2, 2026 to consider FY27 capital raising plan, with trading window closed May 27 to June 4, 2026.
- BRSR report filed for FY26 May 27
Canara Bank submitted its Business Responsibility and Sustainability Report for FY 2025-26 disclosing paid-up capital of ₹1,814.13 crore and turnover of ₹1,53,204 crore.
TL;DR: Canara Bank is executing well on asset quality (GNPA down to 1.84%, Net NPA 0.43%) and core lending profitability through its RAM-focused strategy, but faces headwinds from declining net profit, treasury losses, and a lagging CASA ratio versus private peers. The ₹8,500 crore capital raise and new MD appointment signal intent to accelerate growth. RBI penalties are minor but highlight compliance gaps that need tightening. The trend is cautiously improving — asset quality and NII momentum are strong, and if treasury conditions normalize and CASA targets are met, re-rating toward private sector multiples becomes plausible over FY27-28.
Quarterly Results
| Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 24,304 | 25,451 | 27,290 | 28,492 | 29,286 | 29,173 | 30,182 | 30,751 | 31,496 | 31,523 | 32,072 | 30,938 | 31,839 |
| Expenses | 12,253 | 10,990 | 10,859 | 12,001 | 13,198 | 12,010 | 12,066 | 10,752 | 12,124 | 13,141 | 13,251 | 4,002 | 8,870 |
| Financing Profit | -3,241 | -1,876 | -1,504 | -2,129 | -3,138 | -2,371 | -2,312 | -1,165 | -2,185 | -3,610 | -3,591 | 4,227 | 944 |
| Fin. Margin % | -13% | -7% | -6% | -7% | -11% | -8% | -8% | -4% | -7% | -11% | -11% | 14% | 3% |
| Other Income | 7,470 | 6,809 | 6,602 | 7,138 | 8,098 | 7,793 | 7,824 | 6,679 | 8,761 | 8,086 | 9,942 | 2,152 | 4,700 |
| Interest | 15,292 | 16,337 | 17,934 | 18,620 | 19,226 | 19,534 | 20,427 | 21,163 | 21,556 | 21,992 | 22,412 | 22,709 | 22,024 |
| Depreciation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| PBT | 4,229 | 4,933 | 5,098 | 5,009 | 4,960 | 5,422 | 5,513 | 5,515 | 6,576 | 4,475 | 6,351 | 6,379 | 5,644 |
| Tax % | 24% | 28% | 28% | 25% | 24% | 27% | 26% | 25% | 22% | 33% | 23% | 24% | 22% |
| Net Profit | 3,364 | 3,755 | 3,829 | 3,827 | 3,991 | 4,098 | 4,227 | 4,256 | 5,111 | 3,233 | 4,896 | 5,174 | 4,575 |
| EPS in Rs | 3.68 | 4.12 | 4.19 | 4.18 | 4.36 | 4.48 | 4.62 | 4.65 | 5.59 | 3.52 | 5.35 | 5.79 | 5.04 |
| Gross NPA % | 5.35% | 5.16% | 4.76% | 4.39% | 4.23% | 4.14% | 3.73% | 3.34% | 2.94% | 2.69% | 2.35% | 2.08% | 1.84% |
| Net NPA % | 1.73% | 1.57% | 1.41% | 1.32% | 1.27% | 1.24% | 0.99% | 0.89% | 0.7% | 0.63% | 0.54% | 0.45% | 0.43% |
Profit & Loss
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 43,813 | 44,039 | 41,457 | 41,345 | 47,951 | 49,759 | 70,253 | 70,614 | 85,885 | 1,10,519 | 1,21,601 | 1,26,371 |
| Expenses | 10,302 | 17,785 | 15,691 | 25,582 | 27,202 | 26,809 | 43,437 | 41,235 | 42,772 | 46,146 | 46,082 | 38,340 |
| Financing Profit | -621 | -8,008 | -5,775 | -13,350 | -11,590 | -12,867 | -18,367 | -13,657 | -9,877 | -7,745 | -7,162 | -1,106 |
| Fin. Margin % | -1% | -18% | -14% | -32% | -24% | -26% | -26% | -19% | -12% | -7% | -6% | -1% |
| Other Income | 4,733 | 5,266 | 7,852 | 7,398 | 9,907 | 11,799 | 23,086 | 23,643 | 25,325 | 28,646 | 31,057 | 26,712 |
| Interest | 34,133 | 34,263 | 31,540 | 29,113 | 32,339 | 35,817 | 45,182 | 43,035 | 52,990 | 72,118 | 82,681 | 89,138 |
| Depreciation | 429 | 172 | 331 | 456 | 429 | 446 | 838 | 841 | 1,021 | 902 | 870 | 925 |
| PBT | 3,683 | -2,914 | 1,746 | -6,408 | -2,111 | -1,514 | 3,882 | 9,145 | 14,427 | 20,000 | 23,025 | 24,681 |
| Tax % | 22% | -13% | 29% | -36% | -126% | 34% | 30% | 37% | 25% | 26% | 25% | 23% |
| Net Profit | 2,931 | -2,535 | 1,411 | -3,873 | 696 | -1,921 | 2,957 | 6,158 | 11,345 | 15,401 | 17,692 | 19,712 |
| EPS in Rs | 10.96 | -8.73 | 4.55 | -10.78 | 1.6 | -3.86 | 3.51 | 6.75 | 12.41 | 16.84 | 19.34 | 19.7 |
| Div. Payout % | 17% | 0% | 4% | 0% | 0% | 0% | 0% | 19% | 19% | 19% | 21% | 21% |
Balance Sheet
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 475 | 543 | 597 | 733 | 753 | 1,030 | 1,647 | 1,814 | 1,814 | 1,814 | 1,814 | 1,814 |
| Reserves | 32,017 | 31,867 | 34,088 | 36,164 | 36,936 | 40,176 | 60,763 | 68,147 | 76,240 | 90,319 | 1,03,603 | 1,15,891 |
| Borrowing | 13,686 | 26,963 | 39,592 | 38,910 | 41,043 | 42,762 | 50,013 | 46,285 | 58,073 | 57,538 | 89,665 | 1,55,288 |
| Deposits | 4,85,802 | 4,79,749 | 4,95,266 | 5,24,847 | 5,99,123 | 6,25,408 | 10,10,985 | 10,86,341 | 11,79,086 | 13,12,242 | 14,56,495 | 15,68,333 |
| Other Liabilities | 26,578 | 24,603 | 26,615 | 30,781 | 33,928 | 32,064 | 56,132 | 56,202 | 65,816 | 73,104 | 80,950 | 45,999 |
| Total Liabilities | 5,58,558 | 5,63,725 | 5,96,159 | 6,31,435 | 7,11,783 | 7,41,440 | 11,79,540 | 12,58,789 | 13,81,030 | 15,35,018 | 17,32,527 | 18,87,325 |
| Fixed Assets | 6,969 | 7,206 | 7,185 | 8,335 | 8,433 | 8,323 | 11,269 | 11,447 | 10,334 | 12,184 | 10,302 | 10,595 |
| CWIP | 1 | 0 | 0 | 0 | 0 | 0 | 2 | 2 | 0 | 147 | 0 | 0 |
| Investments | 1,52,122 | 1,52,470 | 1,62,073 | 1,57,444 | 1,68,678 | 1,92,645 | 2,86,191 | 3,11,347 | 3,52,893 | 3,99,207 | 4,28,024 | 4,07,389 |
| Other Assets | 3,99,466 | 4,04,049 | 4,26,901 | 4,65,657 | 5,34,672 | 5,40,472 | 8,82,077 | 9,35,992 | 10,17,803 | 11,23,480 | 12,94,201 | 14,69,341 |
| Total Assets | 5,58,558 | 5,63,725 | 5,96,159 | 6,31,435 | 7,11,783 | 7,41,440 | 11,79,540 | 12,58,789 | 13,81,030 | 15,35,018 | 17,32,527 | 18,87,325 |
Cash Flow
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 6,344 | 9,346 | 2,575 | -11,120 | 18,237 | -5,289 | 59,118 | 919 | -39,978 | 15,046 | 60,669 | 7,942 |
| Investing | -1,104 | -443 | -476 | -487 | -745 | -445 | -1,116 | -1,429 | -1,156 | -1,750 | -2,437 | -2,707 |
| Financing | -1,464 | -806 | 124 | 2,865 | -1,185 | 7,792 | 290 | 4,035 | 445 | -3,834 | -3,506 | -4,795 |
| Net Cash Flow | 3,776 | 8,096 | 2,224 | -8,743 | 16,307 | 2,059 | 58,291 | 3,525 | -40,689 | 9,462 | 54,725 | 440 |
| Free Cash Flow | 5,530 | 8,976 | 2,195 | -11,580 | 17,631 | -5,627 | 58,195 | 98 | -40,591 | 13,793 | 61,830 | 6,652 |
| CFO/OP | 24 | 41 | 17 | -61 | 94 | -30 | 226 | 17 | -83 | 28 | 86 | 12 |
Ratios
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE % | 9% | -8% | 4% | -11% | 2% | -5% | 6% | 9% | 15% | 18% | 18% | 16% |
Documents
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Company Information
Canara Bank was merged with erstwhile Syndicate Bank in FY21. Canara was incorporated in 1906 and nationalised in 1969, along with 13 other major commercial banks of India, by the GoI. The bank is headquartered in Bangalore.Canara Bank was merged with erstwhile Syndicate Bank (e-SB) on April 1, 2020.