Canara Bank, a leading public sector bank, reported a stellar 33.14% jump in its standalone net profit to ₹5,002.66 crore for the fourth quarter of FY25 (January-March 2025), up from ₹3,757 crore in the same period last year, as per an exchange filing on May 8, 2025. The bank’s strong performance, coupled with a dividend announcement, has boosted investor confidence.
Key Financial Highlights
The bank’s Q4 results reflect its operational strength:
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Net Interest Income (NII): Rose 1.4% to ₹9,442 crore from ₹9,580 crore in Q4 FY24, despite challenges in deposit growth.
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Global Business: Grew 11.32% year-on-year to ₹25,30,215 crore, with global deposits up 11.01% to ₹14,56,883 crore as of March 2025.
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Interest Income: Increased to ₹31,495.56 crore from ₹29,286.12 crore in Q4 FY24, driven by higher yields on advances.
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Asset Quality: Gross non-performing assets (GNPA) ratio improved to 2.94% in March 2025, down from 3.34% in December 2024 and 4.23% in March 2024, signaling better loan recovery and risk management.
These metrics highlight Canara Bank’s ability to sustain growth while improving its financial health.
Dividend Declaration and Record Date
The bank’s board recommended a dividend of ₹4 per equity share (face value ₹2), equating to a 200% payout for FY25, pending shareholder approval at the Annual General Meeting (AGM). The record date for determining eligible shareholders is June 13, 2025. This follows a dividend of ₹16.10 per share in FY24 and ₹12 in FY23 (pre-split), offering a current yield of about 4.2%, appealing to income-focused investors.
Canara Bank Share Price Movement
Post-results, Canara Bank’s stock climbed 3.35% to ₹96.81 per share on the NSE as of 1:40 PM on May 8, 2025. With a market capitalization of ₹87,812.97 crore, the stock has delivered a 37.71% return year-to-date and a 93.71% return over the past year, outpacing many PSU bank peers. Investors should note that stock prices are volatile and require careful analysis before investment decisions.
Extensive Branch and ATM Network
As of March 2025, Canara Bank operates 9,849 branches, including 3,139 rural, 2,900 semi-urban, 1,944 urban, and 1,866 metro branches, alongside 9,579 ATMs. The bank also maintains a global footprint with four overseas branches in New York, London, Dubai, and IBU Gift City, reinforcing its position as a key player in the banking sector.
What’s Behind the Strong Performance?
Several factors drove Canara Bank’s robust Q4 results:
1. Enhanced Asset Quality
The drop in GNPA to 2.94% reflects effective loan recovery and prudent risk management, boosting investor trust. An improved provision coverage ratio further strengthens the bank’s balance sheet.
2. Solid Business Growth
An 11.32% rise in global business and strong deposit growth indicate sustained customer confidence and successful outreach efforts.
3. Stable Income Growth
Higher interest income and steady NII growth, despite a slight dip, showcase the bank’s ability to optimize its lending portfolio and manage funding costs effectively.
Outlook for FY26
Canara Bank is poised for continued growth in FY26, with plans to:
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Reduce NPAs: Target a GNPA ratio below 2.5%.
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Boost Digital Banking: Expand digital services to attract younger customers and enhance efficiency.
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Drive Loan Growth: Aim for 10-12% growth in advances, focusing on retail and agriculture sectors.
The bank’s FY25 guidance of 10% growth in advances and 9% in deposits has been largely met, setting a positive tone for the next fiscal year.
Is Canara Bank a Good Investment?
Canara Bank’s strong Q4 results, attractive dividend yield, and improving fundamentals make it a compelling choice in the PSU banking sector. Key investment highlights include:
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Robust Profit Growth: A 33% profit surge signals financial strength.
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High Dividend Yield: A 4.2% yield appeals to income investors.
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Reasonable Valuation: With an EPS of ₹19 and a market cap of ₹86,000 crore, the stock is competitively priced.
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Improving Asset Quality: A lower GNPA ratio enhances long-term stability.
However, risks like interest rate changes, geopolitical tensions, and banking sector competition warrant caution. Investors should consult financial advisors before making decisions.
Conclusion
Canara Bank’s Q4 FY25 net profit of ₹5,003 crore, up 33%, and its ₹4 per share dividend announcement underscore its financial resilience and shareholder focus. With a record date of June 13, 2025, and a stock rally reflecting market optimism, the bank is a standout in the PSU banking space. Its vast network, improving asset quality, and growth plans position it well for FY26, making it a stock to watch for value and income investors.
Stay tuned to The ExpertSK blog for more financial updates and investment insights.
