Canara Bank shares spike 5% post Q1 results; here's why

Canara Bank saw its shares rallying 5 per cent in Thursday's trade after the PSU lender reported a 21.69 per cent year-on-year (YoY) rise in net profit at Rs 4,752 crore for the June quarter compared with Rs 3,905 crore in the same quarter last year. Profit jumped even as net interest income (NII) declined 1.71 per cent to Rs 9,009 crore from Rs 9,166 crore in the same quarter last year. Net interest margin (NIM) for the quarter stood at 2.55 per cent against 2.73 per cent in March and 2.9 per cent in the year-ago quarter.

Following the development, the stock climbed 4.73 per cent to hit a high of Rs 112.90 on BSE.

The bank said its sequential provisions jumped to 15.91 per cent to Rs 3,802 crore in Q1 from Rs 3,280 crore in Q4FY25. That said its gross non-performing assets fell to 2.69 per cent in Q1 against 2.94 per cent in March and 4.14 per cent in the year-ago quarter. This was at least fourth straight quarter of fall in gross NPA ratio for Canara Bank. 

The bank’s global business reached Rs 25,63,984 crore, registering a growth of 10.98 per cent YoY. Of this, global deposits stood at Rs 14,67,655 crore, rising 9.92 per cent, while gross advances grew 12.42 per cent to Rs 10,96,329 crore.

The RAM (Retail, Agriculture and MSME) credit portfolio saw a 14.90 per cent increase. Within the retail segment, credit expanded by 33.92 per cent, led by housing loan growth of 13.92 per cent and vehicle loan growth of 22.09 per cent.

Fee-based income rose 16.39 per cent to Rs 2,223 crore. Earnings per share (EPS) stood at Rs 21.01, up 21.66 per cent YoY. Return on assets (RoA) improved 9 basis points to 1.14 per cent.

In terms of asset quality, the gross NPA ratio fell by 145 basis points to 2.69 per cent, while the net NPA ratio improved by 61 basis points to 0.63 per cent. The provision coverage ratio (PCR) rose 395 basis points to 93.17 per cent. Credit cost declined by 18 basis points to 0.72 per cent.

The bank’s Common Equity Tier-1 (CET-1) ratio stood at 12.29 per cent, improving by 24 basis points YoY.