Canara Bank has posted a strong performance for the second quarter of FY25, reporting a net profit of ₹4,014 crore, a year-on-year increase of 11.3%. This growth comes on the back of improved asset quality and solid business expansion across key segments, as per the bank's regulatory filing.

Key Highlights from Canara Bank’s Q2 Results:

1. Net Profit: ₹4,014 crore, up by 11.3% from ₹3,605 crore in Q2 FY24.
2. Asset Quality Improvement:
   • Gross Non-Performing Assets (GNPA) declined to 3.73%, compared to 4.76% in the previous year.
   • Net Non-Performing Assets (NPA) reduced to 0.99%, a drop of 42 basis points.
3. Provision Coverage Ratio (PCR): Improved to 90.89%, an increase of 216 basis points.
4. Global Business Growth: The bank's global business expanded by 9.42%, reaching ₹23.59 lakh crore.
   • Global deposits surged by 9.34% to ₹13.47 lakh crore.
   • Gross advances grew by 9.53% to ₹10.11 lakh crore.
5. Domestic Business:
   • Domestic deposits increased by 8.34%, touching ₹12.39 lakh crore.
   • Domestic advances rose by 8.64% to ₹9.54 lakh crore.
6. Retail, Agriculture, and MSME (RAM) Lending: Grew by 11.54%, reaching ₹5.76 lakh crore.
   • Retail lending alone saw a surge of 31.27%, totaling ₹1.94 lakh crore.
   • Housing loans grew by 12.29% to ₹99,452 crore.
   • Vehicle loans increased by 15.49%.
7. Fee-Based Income: Increased by 17.68%, amounting to ₹2,436 crore.
8. Capital Adequacy Ratio (CRAR): Strengthened to 16.57%, with Tier-I capital at 14.64% and Common Equity Tier 1 (CET1) at 12.00%.
9. Earnings per Share (EPS): Increased by 10.57%.

Asset Quality and Operational Efficiency

A significant factor contributing to Canara Bank’s strong performance is the improvement in its asset quality. The GNPA ratio, a key indicator of the bank's financial health, declined to 3.73% from 4.76% in the same period last year. Similarly, the Net NPA ratio fell to 0.99%, indicating better loan recovery and reduced defaults. The Provision Coverage Ratio (PCR) also improved to 90.89%, showing stronger financial buffers to cover bad loans.

Credit and Deposit Growth

Canara Bank's global business saw a 9.42% year-on-year growth, led by a 9.34% rise in global deposits to ₹13.47 lakh crore. Gross advances increased by 9.53% to ₹10.11 lakh crore, showcasing a balanced growth across both deposits and lending.

The bank’s domestic operations also showed steady growth, with deposits rising by 8.34% to ₹12.39 lakh crore, and domestic advances growing by 8.64% to ₹9.54 lakh crore. The bank’s strategic focus on RAM (Retail, Agriculture, and MSME) lending helped drive this expansion, with RAM credit growing by 11.54% year-on-year.

Strong Retail and Housing Loan Growth

Retail lending showed robust growth, increasing by 31.27% to ₹1.94 lakh crore, supported by a rise in housing and vehicle loans. Housing loans grew by 12.29%, reaching ₹99,452 crore, while vehicle loans expanded by 15.49%, reflecting strong consumer demand.

Improved Capital Position and Profitability

The bank’s Capital Adequacy Ratio (CRAR) strengthened to 16.57%, an increase of 37 basis points from the previous year, indicating a solid capital position. The slippage ratio, which measures the rate of new non-performing assets, also improved, dropping by 32 basis points to 1.00%.

Earnings per share (EPS) rose by 10.57%, further demonstrating Canara Bank’s strong financial performance in Q2 FY25.

Conclusion

Canara Bank’s Q2 FY25 results highlight its solid financial footing and improved asset quality, supported by strong business growth in retail and MSME segments. With an improved capital position and better operational efficiency, the bank is well-positioned for sustained growth in the coming quarters.

At the time of this report, Canara Bank’s shares were trading 2.63% higher at ₹103.30 on the Bombay Stock Exchange (BSE).