Canara Bank's Managing Director and CEO, Brajesh Kumar Singh, has revealed the bank's robust financial performance in the first quarter, with net interest income (NII) crossing the significant ₹10,000 crore mark for the first time. This achievement was primarily driven by substantial growth in advances, which saw a nearly 18 percent increase for the quarter.
Strategic Focus on RAM and FCNR(B) Flows
Looking ahead to FY27, Singh emphasized the bank's commitment to enhancing its share of Retail, Agriculture, and MSME (RAM) loans within its total advances mix. The RAM segment currently accounts for 59 percent, a slight increase from 58 percent last year, and the bank aims to further boost this proportion. Singh noted that growth in retail, agriculture, and MSME loans has been strong, with MSME growing at 15 percent, indicating a broad-based expansion across all loan categories.
Furthermore, Canara Bank is actively pursuing Foreign Currency Non-Resident (Bank) [FCNR(B)] flows, leveraging recent dispensations from the Reserve Bank of India. Singh projected garnering $2.3 to $2.5 billion from a combination of FCNR(B), External Commercial Borrowings (ECB), and Overseas Foreign Currency Borrowings (OFCB). The bank is particularly concentrating on FCNR(B) this month, with an expectation to collect around $750 million and cross the $1 billion mark by month-end.
Impressive Q1 Performance and FY27 Guidance
The bank's Credit-Deposit (CD) ratio improved significantly to 80 percent in Q1, up from 75 percent year-on-year. Yield on advances stood at 8.8 percent, contributing to a healthy synergy that Singh believes is sustainable given the bank's consistent growth trajectory.
Canara Bank has maintained its advance growth guidance at 11-12 percent for the year, despite being aided by emergency lines of credit. The management has also reiterated its FY27 guidance:
- Net Interest Margin (NIM): 2.5–2.6 percent
- Return on Asset (RoA): 1.02 percent
- Credit Cost: Sub-80 basis points
The bank's asset quality also showed strong improvement, with a minuscule slippage ratio of 0.5 percent for the June quarter, significantly better than the yearly guidance of 0.8 percent.