Canara Bank Q2 Result: We Will Keep The Guidance Given Earlier Unchanged | Brajesh Kumar Singh | Nifty bank
#Canarabankq2 #NiftyBank #Bankingstocks #bankingsector
CNBC Bajar is India’s First Business Channel In Gujarati Language.
The leader of Business News and Information for the last 12 years. Our channel aims to Educate, Inform and Inspire Investor, Consumers to go beyond limitations, with practical tips on Investment, personal finance, technology, Consumer goods and Capital markets. Policymakers and business owners alike have grown to trust CNBC Bajar as the most reliable source with its...
What Brajesh Singh said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Brajesh Singh, MD and CEO of Canara Bank, discussed Q2 FY27 results, attributing the divergence between 20.4% net interest income growth and 8.4% net profit growth to losses in treasury operations due to hardening bond yields, which he said the bank cannot control. He stated NIM is bottoming out, having risen to 2.55% in the quarter from 2.53% full-year, and expects it to improve. Singh highlighted improved asset quality, with gross NPA down to 1.33% from 2.35% a year ago, beating the March 2027 guidance of 1.50%, and called it sustainable with low stress. He credited lower provisions to recoveries and resolved accounts, including a ₹400 crore reversal. On growth, he noted credit growth outpacing deposits due to a low CD ratio, boosted by a $5 billion emergency credit line and $3.2 billion in FCY-B underwriting. He reiterated full-year guidance of 11-12% advances growth and NIM of 2.5-2.6%, saying the bank will stick with it, despite current 19% growth, but aims to better it.
Key takeaways
Net profit growth of 8.4% was limited by losses in treasury operations due to hardening yields, which the bank cannot control.
Asset quality improved faster than planned: gross NPA at 1.33% versus March 2027 guidance of 1.50%, and net NPA at 0.30% versus guidance of 0.40%.
Credit growth is at 19% so far, but the bank maintains its full-year guidance of 11-12% advances growth.
The bank's loan pipeline stands at nearly ₹50,000 crore, supporting future disbursals.
CASA ratio of 29% missed the 30-32% guidance, partly due to $5.8 billion in FCY-B deposits classified as term deposits.
9:17Yes, and Brajesh sir, lastly we'd like to know — with strong NII growth and improvement in asset quality as we're seeing, what full-year guidance would you like to share on credit growth, net interest margin, credit cost, and profitability?
Joining us is Canara Bank's MD and CEO, Brajesh Kumar Singh. Brajesh sir, good morning, welcome to CNBC Awaaz Bazaar. And sir, we'll start with the numbers on the front — we're seeing a surge of 20.4%, but net profit is just 8.4% growth. What is limiting the conversion of this strong core income growth into profitability?
So net interest income is our core business — the interest we earn on the advances we give, and the difference on the deposits we take. But we also have a substantial part in the investment book, the treasury operations. Yields have hardened a lot, as you must have seen, so we haven't earned in treasury. There hasn't been that much income in treasury, so our operating income is a bit lower. Though we have grown, it hasn't grown as much. That's why our net profit is 8.4%. Net 8.4% is also quite good. But we've done quite well in NII. What we lost, the loss, was in treasury operations due to hardening of yields — we have no control over that. We compensated for it with net interest income and delivered a good profit. This profit is also our highest-ever profit in any quarter.
Yes, so sir, we'd like to know about net interest margins. It remains almost flat at 2.53%. Do you feel margins are bottoming out, or could we see further pressure in the second half of FY27?
I think it is bottoming out because last financial year, and a bit before that, our repo rate was cut by 125 basis points. That had an effect — everyone's NIM went on the downside. But you'll see we have protected our NIM over the last two or three quarters, keeping it above 2.5 despite so many headwinds. And now I think going forward we will increase it, because you see that in the quarter our NIM has risen to 2.55%, while the full year is 2.53%. So we've actually increased it by one or two basis points, whereas earlier it was declining. Like we have protected it.
Yes, but sir, despite robust NII growth, we're seeing profit surge of only 2%. What is driving this difference, and can we expect stronger operating leverage?
You'll see that in absolute terms our operating profit has still grown. But as I said earlier, we haven't earned on the investment portfolio — in fact, there were losses. On a mark-to-market basis, in our AFS and HTM, our investments' yields hardened a lot, as you must have seen, so we had losses there, or we couldn't earn on them. That's why our operating profit is a bit lower in percentage terms, but in absolute terms it has also grown quite well. And this will depend on the market — we have no control over it. As our bond yields and markets behave, we have to mark-to-market on a daily basis. So the situation will improve only when that improves.
Yes, so sir, on the asset quality front, we'd like to know — gross NPA shows improvement at 1.33%, net NPA at 0.30%. How much further room do you see for improvement from here, and how sustainable do you see the level of asset quality?
We have improved a lot in this. If you look on a YoY basis, we were at 2.35% gross NPA, which we have brought down to 1.33%. Whereas our guidance for March '27 was that by March '27 we would reach 1.50%, and we had given guidance of 40 for net NPA — we have already achieved 3.0 today, well before March '27. I can say this is sustainable because going forward, the stress on our books is minimal. Below 5% is considered quite good, below 3% is considered very good. Our stress, even including SMA-0, is 2.42%. So there is no stress left in our book going forward. Only stressed accounts get degraded or become delinquent. We don't see any delinquency ahead. This quarter you'll see our delinquency is only 0.15% — that too on an asset book of 13.75 lakh crore, which is very minimal. Even if you annualize it, it comes to only 60. So I guess going forward we will manage or even improve our asset quality. We are also making our underwriting very calibrated and very meaningful.
9 more exchanges in this transcript
Sign in free to read the rest of this interview. No card required.
Singh, B. (2026, October 14). Canara Bank Q2 Result: We Will Keep The Guidance Given Earlier Unchanged | Brajesh Kumar Singh | Nifty bank [Interview transcript]. CNBC Bajar. CEOInterviews.AI. https://ceointerviews.ai/interview/3062287/
MLA
Brajesh Singh. "Canara Bank Q2 Result: We Will Keep The Guidance Given Earlier Unchanged | Brajesh Kumar Singh | Nifty bank." CNBC Bajar, 14 Oct. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/3062287/.
BibTeX
@misc{singh2026_3062287,
author = {Brajesh Singh},
title = {Canara Bank Q2 Result: We Will Keep The Guidance Given Earlier Unchanged | Brajesh Kumar Singh | Nifty bank},
howpublished = {Interview transcript, CNBC Bajar. CEOInterviews.AI},
year = {2026},
month = {oct},
url = {https://ceointerviews.ai/interview/3062287/},
note = {Speaker-attributed transcript with timestamps}
}
