Canara Bank limited: comprehensive Stock Analysis Report
- Editor
- 19 hours ago
- 2 min read
Canara Bank is one of India’s largest public sector banks, founded in 1906 and nationalised in 1969. It operates as a universal bank with a strong pan-India presence, having 9,706 branches and 12,130 ATMs/recyclers (March 2023), and functions as a financial conglomerate with 13 subsidiaries and sponsored institutions across housing finance, asset management and insurance.
Financial Performance & Turnaround
The bank has delivered a strong profitability turnaround over the last few years. Net profit increased from ₹6,158 crore in FY22 to ₹11,345 crore in FY23, ₹15,401 crore in FY24, and about ₹17,692 crore in FY25. Total income rose steadily to ~₹1.52 lakh crore in FY25, supported by growth in both interest income and fee-based revenues. ROE crossed 18% in FY25, reflecting improved operating leverage and lower credit costs.
Asset Quality & Capital Position
Asset quality has improved materially following a multi-year clean-up. Gross NPA declined from 7.51% (FY22) to 5.35% (FY23), ~4.23% (FY24) and about 2.94% (FY25), while Net NPA reduced from 2.63% to ~0.70% over the same period. The Provision Coverage Ratio increased to ~92.6%, indicating conservative provisioning. Capital strength remains comfortable, with Basel III CAR around 16–16.7%, well above regulatory requirements.
Business Mix & Growth Strategy
Canara Bank is gradually shifting its loan mix towards Retail, Agriculture and MSME (RAM) segments to improve margins and reduce concentration risk. Retail advances grew 10.9% YoY to ₹1.40 lakh crore in FY23, led by housing and education loans. Agriculture advances reached ₹2.13 lakh crore (+21.2% YoY), while MSME advances stood at ₹1.24 lakh crore. Corporate banking remains important for scale and fee income, though growth is selective and quality-focused.
Digital & Strategic Initiatives
The bank has accelerated its digital transformation through the Analytics Department and DnA Centre in Bengaluru, deployment of AI/ML models, and platforms such as Canara ai1 mobile app, video KYC, API banking and upgraded cybersecurity systems. These initiatives aim to improve underwriting, cross-sell, cost efficiency and fraud control.
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