Canara Bank Q1 Results: PSU lender jumps after asset quality improves, slippages moderate

Shares of state-run Canara Bank Ltd. recovered from the lows of the day to gain as much as 3% after the Bengaluru-based lender reported its Q1 results on Monday, July 27.

The lender saw a moderate increase in profitability but saw an improvement in asset quality as well as slippages on a sequential basis during the quarter.

Canara Bank's Net Interest Income (NII) or core income during the quarter grew by 13% to ₹10,216 crore from ₹9,008 crore last year.

Net profit for the period increased to ₹4,856 crore, a 2% increase from the ₹4,752 crore last year. Provisions for the quarter saw a significant increase to ₹2,080 crore from ₹991.8 crore during the March quarter, and ₹2,352 crore YoY.

Net Interest Margins for the June quarter remained steady at 2.52% from 2.55% during the same quarter last year.

CANARA BANK ASSET QUALITY IMPROVES SEQUENTIALLY

Canara Bank's asset quality improved from the previous quarter with its Gross Non-Performing Assets moderating to 1.57% from 1.84% in March. Net NPA also improved to 0.36% from 0.43% in the previous quarter.

In absolute terms, Gross NPAs have improved to ₹20,354 crore from ₹22,740 crore in the March quarter, while its Net NPAs stood at ₹4,653 crore from ₹5,209 crore last quarter.

Fresh slippages for the quarter moderated to ₹1,781 crore, from ₹2,771 crore during the March quarter. Slippage ratio at the end of the June quarter also moderated to 0.15% from 0.24% in March.

CANARA BANK GUIDANCE

When we look at the guidance that the lender has given, Canara Bank gave guidance of CASA (Domestic CASA to Domestic Deposit) of 30%-32% for March 2027. The bank had attained a CASA growth of 29.70% in June 2026.

The guidance for NIM (Global)(Annualized) stood at 2.50%-2.60%. The June 2026 growth came in at 2.52%. Furthermore, the guidance for Business growth (global) was pegged at 10%-11%.



Shares of Canara Bank are now trading 2.5% higher after the results announcement at ₹128.85. The stock is still down 17% so far this year. The stock is at 21.06% from its 52-week high mark of ₹162.89 per share.