Mumbai-based public sector lender Canara Bank has announced impressive financial results for the third quarter of the fiscal year 2025-26, showcasing a significant surge in profitability and strengthened operational metrics. The bank reported a robust 26% year-on-year increase in net profit, reaching Rs 5,155 crore for the quarter ended December 31, 2025. This growth was primarily fueled by a higher operating profit, a substantial rise in non-interest income, and a marked improvement in asset quality, reflecting the bank's strategic focus on efficiency and risk management.
Operating Performance and Income Highlights
Operating profit for Canara Bank rose by 16.4% compared to the same period last year, amounting to Rs 9,119 crore. Total income saw a healthy increase of 10.4%, reaching Rs 39,881 crore. Net interest income, a key indicator of core banking operations, grew marginally by about 1.1% year-on-year to Rs 9,252 crore. This modest growth was attributed to a 5.5% rise in interest income, which was partially offset by a 7.4% increase in interest expenses, indicating competitive market conditions and cost pressures.
Non-Interest Income and Expense Management
Non-interest income emerged as a major growth driver, surging 36.2% year-on-year to Rs 7,900 crore. This impressive performance was supported by a sharp jump in gains from the sale of investments, highlighting the bank's effective treasury management and diversification efforts. On the expense front, operating expenses increased by 12.9% to Rs 8,033 crore, reflecting higher staff costs and other operational expenditures as the bank scales its activities.
Asset Quality and Provisioning Trends
Provisions for the quarter increased by 6.2% year-on-year to Rs 3,964 crore. While tax provisions contributed to this rise, provisions for non-performing assets (NPAs) declined sharply, signaling a significant improvement in asset quality. Gross non-performing assets fell substantially to Rs 24,833 crore from Rs 35,061 crore a year ago, with the gross NPA ratio improving to 2.08% from 3.34%. The net NPA ratio also declined to 0.45%, and provision coverage strengthened to 94.19%, underscoring the bank's enhanced risk mitigation strategies.
Balance Sheet Expansion and Credit Growth
Canara Bank reported steady balance sheet expansion, with global deposits rising approximately 13% year-on-year to Rs 15.21 lakh crore. Global advances grew nearly 14% to Rs 11.92 lakh crore, driven by robust credit growth in key segments. The retail, agriculture, and MSME (micro, small, and medium enterprises) segments collectively grew nearly 19% from a year earlier, demonstrating the bank's focus on inclusive lending and support to vital sectors of the economy.
Profitability and Capital Adequacy Metrics
Profitability ratios showed notable improvement during the quarter. The return on assets (ROA) rose to 1.16%, while the return on equity (ROE) increased to 20.65%, indicating efficient use of resources and strong shareholder value creation. Capital adequacy also strengthened, with the Common Equity Tier-1 (CET-1) ratio increasing to 12.37%, providing a solid buffer for future growth and regulatory compliance.
Overall, Canara Bank's Q3 FY26 results reflect a resilient performance amid evolving economic conditions, with gains across multiple financial parameters positioning it as a key player in India's banking landscape.
