Canara Bank Raises Credit Growth Guidance to 13.5%, Focuses on RAM and CASA for Margin Resilience

Canara Bank has raised its credit growth guidance to 13.5% (from 10–11%) driven by strong momentum in the Retail, Agriculture, and MSME (RAM) segment, which grew 18.7% YoY. Retail loans surged 31% YoY to ₹2.73 lakh crore, led by housing and vehicle finance, while corporate advances rose 7% to ₹4.88 lakh crore, with further disbursements expected. Interim MD & CEO Hardeep Singh Ahluwalia highlighted that despite a tight rate cycle, the bank is managing margin pressures effectively. NIMs have stabilized at 2.45–2.50%, supported by higher-yielding RAM assets—MSME yields at 9.28%, and overall RAM at 8.88%—as the bank shifts toward a 60:40 RAM-to-corporate loan ratio. On the liability side, deposits are growing at 12.95%, with CASA up 9.32%, outperforming many peers. Initiatives like premium payroll accounts, Aspire (for students/women), Jeevan Dhara (pensioners), and True Edge (institutions) are helping retain low-cost deposits amid sector-wide CASA stress. The bank is also well-prepared for the transition to the Expected Credit Loss (ECL) framework, estimating additional provisions of ₹8,000–10,000 crore, to be amortized over four years. With provision coverage at 94.19% and robust profits projected at ₹17,000–20,000 crore+ for FY26, Canara is confident in absorbing new norms without capital stress. Supported by EY’s advisory and Coforge’s tech integration, the bank remains strategically poised for sustainable growth, improved asset quality, and resilience under evolving regulatory standards.