BTTV Exclusive | Canara Bank's MD and CEO on FY27 guidance, RAM growth and FCNR(B) flows

Brajesh Kumar Singh, MD and CEO of Canara Bank on Tuesday said his public sector bank would look for a higher share of RAM (Retail, Agriculture, and MSME) in its total advances mix going ahead. So far, the mix stood at 59 per cent of total advances, he told Business Today TV in an exclusive interview.

Singh said his bank's net interest income (NII) crossed Rs 10,000 crore for the first time in the June quarter, led by growth in advances. Advances for the quarter grew 17.97 per cent, close to 18 per cent, he said.

Singh said Canara Bank's Credit-Deposit (CD) ratio improved to 80 per cent in Q1 from 75 per cent year-on-year (YoY). Besides, he noted that his bank's yield on investment stood at 6.90 per cent and yield on advances at 8.8 per cent.

"That 110 basis points synergy was also there, so that has helped us. And going forward, we see that this is sustainable, considering we are growing," Singh told BTTV.

Singh said his bank will keep its advance growth guidance at 11-12 per cent , even as the lender has been aided by emergency line of credit. "There is no fun in revising guidance over guidance. Guidance will be there, but we always say that we will be bettering it," Singh said.

The bank management has reiterated its FY27 net interest margin (NIM) guidance of 2.5–2.6 per cent, return on asset (RoA) estimate of 1.02 per cent and credit cost guidance at sub-80 basis points.

In the case of loan growth, Singh said Canara Bank's growth in retail loans was robust. "Agriculture also we have grown, and MSME  we've grown at 15 per cent. Large corporate book has also grown. So our growth was not a lopsided, it was across the board. Going forward, we would like to have little more share of our RAM in our total advances mix. As of last year, it was 58 per cent," Singh said.

He noted that RAM together was at 58 per cent per cent out of total advances mix last year, which has grown up this year to 59 per cent.

"There are three dispensations which has come recently through RBI. One is FCNR, the others are ECB and OFCB. OFCB and ECB are available up to December this year while FCNR is up to September only, where a free rupee swap is available for everybody including us. We are targeting FCNR, and we have given a guidance taken together all these three, garnering $2.3 to $2.5 billion in the base case," Singh said..

Singh said his bank is concentrating more on FCNR this month. He believes his bank will garner about $750 millions. "By the month end we will be, uh, we will be certainly be crossing $1 billion," he said.

Singh said his bank's slippage ratio was minuscule at 0.5 per cent for the June quarter. It was, he said, far better than the guidance of 0.8 per cent the bank gave for the year