Canara Bank Q1 profit rises 2% to Rs 4,856 cr, lender eyes USD 1.3 bn

State-owned Canara Bank on Monday posted a 2 per cent improvement in net profit to Rs 4,856 crore during the first quarter of the current financial year, and said it aims to garner USD 1.3 billion in deposits from overseas Indians.

The Bengaluru-based bank had earned a net profit of Rs 4,752 crore in the same quarter of the previous fiscal year. The total income rose to Rs 39,684 crore during the June quarter of fiscal year 2026-27, from Rs 38,063 crore in the same quarter of FY26, Canara Bank said in a regulatory filing.

Interest earned by the bank improved to Rs 32,957 crore as compared to Rs 31,003 crore in the June quarter of FY26.

Commenting on the numbers, Canara Bank MD and CEO Brajesh Kumar Singh said the bank’s net interest income (NII) crossed Rs 10,000 crore this quarter, registering a 13 per cent growth.

NII of the bank rose to Rs 10,215 crore from Rs 9,009 crore in the same quarter a year ago, he said.

During the post-earnings call, the bank revealed plans to mobilise about $1.3 billion through FCNR(B) deposits and another $1 billion in overseas foreign currency borrowings.

From External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs), Singh said, the bank plans to raise USD 500 million each.

So far, he said, the bank has raised $775 million under the Foreign Currency Non-Resident (Bank) deposit window.

In a bid to attract foreign currency deposits by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs), the RBI last month withdrew the interest rate ceiling on fresh FCNR(B) deposits of 3-5 years’ maturity. The special window is open till September 30.

For ECBs and OFCBs, banks have been given time till December 31, 2026, by the Reserve Bank of India.

The move came after FCNR(B) deposit inflows weakened sharply, with net inflows dropping to just $ 946 million in FY26, down from $7.1 billion in FY25.

In 2023, the RBI had introduced similar schemes when dollar outflows were high, triggered by the taper tantrum.

Speaking about recovery, Singh said the bank has done a total recovery of Rs 2,500 crore during the quarter and also contained slippages.

Slippage ratio improved to 0.60 per cent, better by 20 bps, he said.

He also said that there is no plan to further dilute the bank’s stake in any other subsidiaries at the moment.

During the period under review, operating profit of the bank increased to Rs 8,636 crore, as compared to Rs 8,554 crore in the same quarter a year ago.

The bank’s asset quality showed improvement as gross non-performing assets (NPAs) declined to 1.57 per cent of gross advances at the end of the June quarter, from 2.69 per cent a year ago.

Similarly, net NPAs, or bad loans, declined to 0.36 per cent, as against 0.63 per cent in the year-ago period.

As a result, provisions for bad loans declined to Rs 1,399 crore during the first quarter as compared to Rs 1,845 crore in the same period a year ago.

Provision Coverage Ratio (PCR) improved to 94.76 per cent, from 93.17 per cent at the end of the first quarter of the previous financial year.

At the same time, Return on Assets (ROA) deteriorated to 1.04 per cent in June 2026 from 1.14 per cent in June 2025. Capital adequacy ratio of the bank rose to 17.17 per cent from 16.52 per cent in the same quarter of FY26.

Global business of the bank increased by 14 per cent to Rs 29,05,066 crore, while total deposits rose by 12 per cent to Rs 16,11,685 crore, and total advances by 18 per cent to Rs 12,93,381 crore as of June 2026.