Canara Bank beats estimate, reports 11% growth in net profit to ₹4,014 crore in Q2FY24

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State-owned Canara Bank reported a net profit of ₹4,014 crore for the second quarter ending September 30, FY25, beating estimates and reflecting an 11.31 percent year-on-year (YoY) increase from ₹3,606 crore in Q2 FY24. The bank’s net interest income improved to ₹9,315 crore, up from ₹8,903 crore in the same period last year.

The operating profit was nearly flat at ₹7,654 crore, up slightly from ₹7,616 crore on a YoY basis. Global deposits were ₹13,47,347 crore, up by 9.34 percent, while gross advances reached ₹10,11,997 crore growing by 9.53 percent.

The global business has reached an all-time high of ₹23,59,344 crore, reflecting a YoY growth rate of 9.42 percent, according to the bank.

On the lending front, RAM (Retail, Agriculture, and MSME) credit saw an increase of 11.54 percent on a yearly basis. Credit to retail reached ₹1,94,556 crore, growing by 31.27 percent YoY. The overall lending portfolio rose to ₹99,452 crore, up from ₹88,564 crore in the corresponding quarter last year.

However, the net interest margin (NIM) contracted from 3.00 percent in Q2 FY24 to 2.86 percent in the September quarter this year. Sequentially, it declined from 2.90 percent in the June quarter.

The current earnings per share of Canara Bank stands at ₹17.41, reflecting a robust year-on-year growth of 10.57 percent, noted K. Satyanarayana Raju, MD & CEO of Canara Bank.

He added, “With a fee-based income growth of 17.68 percent and a slippage ratio nearing 1 percent, we are on track to meet our annual business growth target of 10 percent. We have already achieved a growth rate of 9.42 percent by capitalizing on strong performance in both credit and deposits.”

The performance was supported by higher treasury gains and recovery from written-off loans, similar to other public sector banks (PSBs), noted Anand Dama, Head of BFSI at Emkay Global Financial Services.

However, he expressed concern regarding the elevated SMA (Special Mention Accounts) book, which includes a large PSU account. “The consortium is working to resolve the issue, with hopes that the account will not turn into a Non-Performing Asset (NPA),” he said.

The shares of Canara Bank closed at ₹103.70, with an increase of 3.03 percent on the BSE following the results announcement.