Canara Bank (BOM:532483) Q1 2027 Earnings Call Highlights: Strong Growth in Global Business and ...

This article first appeared on GuruFocus .

Release Date: July 27, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Global business grew by 14.37% YOY, reaching 29.05 lakh crores.

• Net interest income increased by 13.39% YOY, surpassing the 10,000 crore mark for the first time.

• The bank's CET1 ratio improved by 62 basis points YOY, standing at 12.91%.

• Gross NPA reduced by 112 basis points YOY, now at 1.57%.

• Retail credit within the RAM segment grew by 35.88% YOY, indicating strong performance in this area.

Negative Points

• SMA2 numbers increased significantly from 1,394 crores to 3,482 crores, indicating potential stress in some accounts.

• Treasury income decreased compared to the same quarter in 2025 due to hardened yields and lack of arbitrage opportunities.

• The bank's CASA ratio remains below 30%, which is lower compared to peers.

• Fee-based income showed sluggish growth, increasing only by 5.35% YOY.

• The bank faces challenges in improving its efficiency parameters, particularly in terms of CASA percentage.

Q & A Highlights

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Q: Can you explain the increase in SMA-2 accounts and the status of ECLGS 5.0 disbursements? A: The increase in SMA-2 accounts is due to a few large government-guaranteed accounts oscillating between SMA-0, 1, and 2. These accounts are stable and not a concern. Regarding ECLGS 5.0, we identified 90,000 crore worth of eligible accounts, sanctioned over 11,000 crore, and disbursed 10,000 crore, with more expected to be disbursed soon. MD and CEO

Q: How has the treasury income and PSLC commission impacted the bank's profitability this quarter? A: Treasury income was lower this quarter due to hardened yields, earning only 654 crore compared to 1,617 crore in the same quarter of 2025. However, PSLC income was strong at 1,947 crore, primarily occurring in the first quarter. Provisions were higher this quarter, impacting profitability. MD and CEO

Q: What is the bank's strategy regarding NIM and CASA balance, and how do you plan to improve efficiency? A: The focus is on improving efficiency parameters, particularly by increasing CASA from the current 29.70%. We aim to replace high-cost bulk deposits with retail deposits and FCNRB funds. The goal is to protect and potentially increase NIM from the current 2.50% to 2.60%. MD and CEO

Q: What is the bank's approach to handling the transition to ECL and its impact on credit costs? A: We anticipate needing an additional 10,000 crore in provisions for ECL, with a potential impact of 1.2% to 1.25% on capital adequacy. We plan to absorb this over two years, leveraging our strong capital position and profitability. The impact on credit costs is expected to be minimal, around 10 basis points. MD and CEO