Canara Bank Q2 Results: Profit Rises 8.4% to ₹5,175 Crore as GNPA Falls to 1.33%

Canara Bank’s September-quarter numbers were better than the treasury line suggested. In its Canara Bank Q2 results, the state-owned lender posted standalone net profit of ₹5,175 crore, up 8.4% year-on-year from ₹4,774 crore, as faster lending and cleaner books made up for a steep fall in treasury income. The board signed off on the numbers on Wednesday, October 14, and the stock rose nearly 5% during the session, according to ET Now.

Canara Bank Q2 results: the numbers that matter

The headline figures below come from Business Standard and the bank’s exchange filing as summarised by Kalkine:

• Net profit: ₹5,175 crore, up 8.4% year-on-year and 6.6% from ₹4,856 crore in the June quarter.
• Net interest income (NII): ₹11,005 crore, up 20.4% from ₹9,141 crore a year ago and 7.7% from ₹10,215 crore in the previous quarter.
• Net interest margin: 2.55%, against 2.52% in the June quarter and 2.50% a year earlier.
• Operating profit: ₹8,758 crore, up only about 2% from ₹8,588 crore a year ago.
• Provisions (other than tax): ₹1,782 crore, down from ₹2,354 crore a year ago and ₹2,080 crore in the June quarter.

Where the treasury income went

Why did operating profit grow so much slower than NII? Other income. Non-interest income fell 18.2% year-on-year to ₹5,772 crore. Treasury income dropped 68.5% to ₹499 crore from ₹1,583 crore, and profit on the sale of investments shrank to ₹153 crore from ₹1,217 crore as bond yields hardened, Business Standard reported. Recoveries from written-off accounts were 25% lower too, at ₹1,260 crore.

Bad loans at fresh lows

The gross NPA ratio, bad loans as a share of gross advances, improved to 1.33% at the end of September from 1.57% in June and 2.35% a year earlier. Net NPA eased to 0.30% from 0.36% in June and 0.54% a year ago. In rupee terms, gross NPAs came down to ₹18,299 crore from ₹27,040 crore, and the provision coverage ratio rose to 95.34% from 93.59% a year ago. Fresh slippages were ₹1,844 crore, a touch above ₹1,781 crore in the June quarter. The annualised slippage ratio was 0.58%, and annualised credit cost fell 21 basis points to 0.47%.

Loans ran ahead of deposits

Global gross advances grew 19.46% year-on-year to ₹13,75,060 crore. Global deposits rose a slower 13.13% to ₹16,97,305 crore, taking global business to ₹30,72,365 crore, up 15.88%, according to BusinessLine and the Free Press Journal. Retail did the heavy lifting: retail loans were up 31.61% to ₹3,30,587 crore, with housing loans up 17.35% and vehicle loans up 25.50%. Credit to retail, agriculture and MSME borrowers together rose 21.03% to ₹8,12,310 crore. Domestic deposits grew just 10.97%.

Capital adequacy stood at 17.19%, against 16.20% a year earlier, with common equity tier-1 at 12.80%. If you want to see why the deposit mix matters so much for a lender like this, our guide to the CASA ratio walks through it.

What management said, and how the stock reacted

Management told CNBC-TV18 it expects FY27 credit growth to beat its 11-12% guidance and wants to hold net interest margin at 2.5-2.6%. The credit-deposit ratio went above 81% in the quarter. That’s the reason the bank is leaning on deposit campaigns, so funding can keep pace with loans.

The shares hit an intraday high of ₹126.47 against a previous close of ₹120.44, ET Now reported, and closed at ₹124.76 on the NSE, according to CNBC-TV18. Even after that move, ET Now noted, the stock was still down about 19% so far in 2026.

Core lending carried the quarter

This was a quarter where profit came from lending, not bond gains. NII rose about 20% while treasury income shrank by more than two-thirds. That makes earnings less exposed to swings in the bond market. The flip side is that the bank now needs loan growth and margins to hold up while deposits keep growing slower than advances. For PSU bank watchers this results season, the two things to track are whether deposit growth catches up and whether slippages stay in check as the retail book gets bigger. We had previewed the board meeting in our Canara Bank Q2 results date post. For more on reading bank numbers, see how to analyse quarterly results, and follow the day’s moves on our Stock Market Today India hub.