Driving progress. Strengthening the path to growth.
Shri Brajesh Kumar Singh, Managing Director & Chief Executive Officer, Canara Bank, discusses the Bank’s Q2 FY 2026–27 financial results, offering perspectives on business performance, key focus areas and the road ahead.
Catch his exclusive interaction on CNBC Bajar.
[Canara Bank, Q2 FY 2026-27, Exclusive Interview, Business Performance]
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What Brajesh Singh said
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Brajesh Singh, MD & CEO of Canara Bank, discussed Q2 FY2026-27 results. He attributed the gap between NII growth (20.4%) and net profit growth (8.4%) to losses from treasury operations due to hardening yields, which he said are beyond the bank's control. He said NIM is bottoming out and has improved to 2.55% in the quarter. On asset quality, he highlighted gross NPA improved to 1.33% from 2.35% YoY, better than the March 2027 guidance of 1.50%. He said stress is minimal, with delinquency at 0.15%. He explained provisions declined due to resolutions and no expected slippages. Credit growth was strong, aided by an emergency line of credit (₹5.0 billion) and FCNR(B) deposits (₹3.2 billion). He expects broad-based growth, tilted to retail this quarter. He reaffirmed guidance of 11-12% advances growth, though current growth is 19%.
Key takeaways
Gross NPA improved to 1.33%, below the March 2027 guidance of 1.50%.
Net NPA at 0.30%, better than the 0.40% guidance.
Delinquency is only 0.15% of the asset book, with stress at 2.42% including SMA zero.
Credit growth is 19%, exceeding the 11-12% guidance, which remains unchanged.
NIM is bottoming out at 2.53% full-year, with quarterly improvement to 2.55%.
9:21Yes, and Brajesh sir, lastly we'd like to know — 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?
Welcome back once again to the show. With us now is the MD and CEO of Canara Bank, Brajesh Kumar Singh. Brajesh sir, good morning, welcome to CNBC Awaaz. And sir, let's start with the numbers on the front. We're seeing a surge of 20.4% in NII, 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 a substantial part of it is also our investment book, the treasury operations. Now 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. That's why our operating income is a bit lower. Though we have grown, it hasn't grown as much. That's why our net profit is 8.40%. Net 8.4% is also quite good. But we've done quite well in NII. The shortfall, the loss we had in treasury operations is due to the 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 profit in any quarter.
Yes, sir. On net interest margins, we'd like to know — 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. So that had an effect. Everyone's NIM went on the downside. But you'll see that 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'll see that in the quarter our NIM has risen to 2.55%, and for the full year it's 2.53%. So we have actually increased it by one or two basis points. Earlier it was declining. Like I said, we have protected it.
Yes, but sir, despite robust NII growth, we're seeing a surge in profit 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 didn't earn from the investment portfolio. In fact, there were losses. On a mark-to-market basis, the yields on our assets and investments in AFS and HTM have hardened a lot, as you must have seen, so we incurred losses there, or rather we couldn't earn from it. 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 these days. So this situation will improve only when that improves.
Yes. So 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 this 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 the net NPA guidance we had given of 0.40% — we have already brought that to 0.30% today. I can say this is sustainable because going further, the stress on our books is very minimal. Below 5% is considered quite good, below 3% is considered very good. Our stress, even including SMA zero, is 2.42%. So there is no stress left on our books. Going forward, only stressed accounts get degraded or become delinquent. So we don't see any delinquency ahead. In this quarter, you'll see our delinquency is only 0.15%, on an asset book of 13.75 lakh crore, which is very minimal. Even if you annualize it, it comes to only 0.60. So I guess going forward too, we will manage or even improve our asset quality. We are also making our underwriting very calibrated and very meaningful.
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