Canara Bank Q2 FY27 Results (NSE: CANBK)
Signal: Earnings grew
The read
The trajectory is a recovery in credit quality rather than a reacceleration in core earnings: total income declined 2.6% YoY and operating profit grew only 0.7%, but provisions fell 24.3%, gross NPA improved to 1.33% from 2.35%, and consolidated PAT rose 10.9% with ₹200.78 crore of associate earnings.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹40,938.8 Cr | -2.6% | +3.1% |
| EBIT | ₹8,767.6 Cr | +0.7% | |
| Net profit | ₹5,381.59 Cr | +10.9% | |
| EPS | ₹5.93 | +10.8% | |
| EBIT margin | 21.42% |
P&L walk
Consolidated operating profit was broadly stable at ₹8,767.60 crore, up 0.7% YoY, while PAT rose 10.9% to ₹5,381.59 crore because associate earnings of ₹200.78 crore and lower minority interest supplemented the operating result.
Segments
Retail Banking drove the group with ₹20,622.99 crore of revenue and ₹5,187.32 crore of segment result, while Wholesale Banking turned profitable at ₹239.90 crore from a ₹14.17 crore loss YoY; Life Insurance contributed ₹40.80 crore of result and associate earnings lifted consolidated PAT above standalone PAT by ₹206.83 crore.
Key positives
- Gross NPA improved to 1.33% from 2.35% YoY and net NPA to 0.30% from 0.54%, while provision expense declined 24.3% to ₹1,781.98 crore.
- Advances grew 20.4% YoY to ₹13,60,814.89 crore, materially ahead of 11.1% deposit growth to ₹16,96,935.00 crore.
- Wholesale Banking turned around to a ₹239.90 crore segment profit from a ₹14.17 crore loss YoY.
- Capital adequacy strengthened to 17.19% from 16.26% YoY, supporting continued balance-sheet growth.
Key concerns
- Total income declined 2.6% YoY to ₹40,938.80 crore and operating profit increased only 0.7% to ₹8,767.60 crore, indicating subdued core earnings momentum.
- Consolidated PAT growth of 10.9% was partly supported by ₹200.78 crore of associate earnings, while standalone PAT grew a slower 8.4%.
- Advances grew 20.4% YoY against deposits growth of 11.1%, creating a funding-growth gap that warrants monitoring.
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