Canara Bank Q2 Results: Net Profit Rises 9% To ₹5,175 Crore, PSU Bank Stock Jumps 4% As Bad Loans Decline

Mumbai: Shares of public sector lender Canara Bank surged nearly 4 per cent on Wednesday after the bank reported improved financial performance for the second quarter of FY27. Strong growth in net interest income, lower bad loans and reduced provisions supported the bank's September quarter earnings.

The PSU banking stock climbed to Rs 125.17 following the announcement, even as it remained under pressure on a year-to-date basis.

Net Profit Rises 9 Percent

Canara Bank reported a net profit of Rs 5,175 crore for the September 2026 quarter, registering a 9 per cent increase compared with Rs 4,774 crore in the corresponding quarter last year.

The improvement came on the back of higher core income and lower provisions, reflecting stronger operating performance during the quarter.

Net Interest Income Jumps 20.4 Percent

The bank's net interest income (NII), representing the difference between interest earned and interest paid, increased 20.4 per cent year-on-year.

NII reached Rs 11,004 crore during the September quarter, compared with Rs 9,141 crore in the year-ago period.

The double-digit growth in core income highlighted the lender's expanding loan business and interest earnings.

Asset Quality Shows Improvement

Canara Bank reported a sequential improvement in asset quality, with its gross non-performing asset (GNPA) ratio declining to 1.33 per cent from 1.57 per cent in June.

The net NPA ratio also improved to 0.30 per cent from 0.36 per cent.

In absolute terms, gross bad loans declined to Rs 18,298.95 crore from Rs 20,354.34 crore, while net NPAs fell to Rs 4,053.19 crore from Rs 4,652.95 crore.

Provisions Decline, Slippages Rise Slightly

Provisions declined to Rs 3,583 crore from Rs 3,780 crore in the preceding quarter, providing additional support to profitability.

However, fresh slippages increased marginally to Rs 1,844 crore from Rs 1,781 crore in June.

Loan And Deposit Growth Remains Strong

The bank's loan book expanded 19.3 per cent year-on-year to Rs 13.73 lakh crore, while sequential growth stood at 6.2 per cent.

Deposits increased 13.1 per cent annually to Rs 16.97 lakh crore, reflecting continued business expansion.

Canara Bank Share Price Reaction

Following the results, Canara Bank shares gained around 4 per cent to Rs 125.17.

Despite the positive earnings reaction, the stock remained approximately 19 per cent lower so far in 2026, highlighting the gap between improving quarterly fundamentals and its broader market performance.

Disclaimer: This article is based on reported financial results and market data. Investors should verify information before making investment decisions.