The rise in Canara Bank share price comes after the lender reported a net profit of Rs 4,774 crore in Q2, up 19% from Rs 4,014 crore in the same quarter of the previous financial year. The PSU bank, however, reported a marginal 2% dip in its net interest income to Rs 9,141 crore, compared to Rs 9,315 crore in the corresponding quarter of the previous year.
The bank reported a 12.20% year-on-year increase in operating profit to Rs 8,588 crore, supported by strong growth across key business segments.
Global business expanded 13.55% year-on-year to Rs 26,78,963 crore, driven by healthy momentum in both global deposits and advances. Global deposits rose 13.40% to Rs 15,27,922 crore, while global advances increased 13.74% year-on-year to Rs 11,51,041 crore, reflecting robust credit demand and sustained business traction.
On the asset quality front, the bank delivered significant improvement, with gross non-performing assets (GNPA) declining by 138 basis points year-on-year to 2.35%. Net NPA also fell by 45 basis points to 0.54%, highlighting the bank’s effective credit risk management and prudent lending practices.
Credit cost improved to 0.68%, down 29 basis points year-on-year, indicating better asset quality and controlled slippages. The Provision Coverage Ratio (PCR) strengthened further to 93.59%, up 270 basis points year-on-year, underlining the bank’s strong provisioning buffers.Return on Assets (ROA) improved to 1.12%, an increase of 7 basis points year-on-year, reflecting enhanced operational efficiency and profitability.Further momentum in PSU bank stocks like Canara Bank also stems from foreign investors, policy buzz, and improving balance sheets. The rally has been reinforced by speculation that the government may raise the foreign ownership limit in PSU banks to 49% from 20%, a move that could reshape the sector’s investor base.
According to Nuvama Institutional Equities, such a change could unlock as much as $4 billion in passive inflows.
“If there’s any truth to this development, PSU banks could easily rally 20–30% in anticipation of such massive inflows,” Nuvama said. The brokerage estimates Canara Bank can attract $305 million in foreign flows alone.
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At about 10:45 am, shares of Canara Bank were trading at Rs 140, up 2.6% from the last close on the NSE. Canara Bank shares have jumped 45% in the last 6 months.
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