Key Highlights
- Canara Bank board approved ₹9,500 crore fundraising for FY26 via Basel III‑compliant AT1 and Tier II bond issuances.
- The bond issue strengthens capital adequacy, supports credit growth, and follows 33% YoY Q4 profit rise.
Canara Bank shares will be closely watched on Friday after the lender announced that its board has approved a capital-raising plan of up to Rs 9,500 crore for FY26 through the issuance of debt instruments.
"In its meeting on June 12, 2025, the Bank's Board of Directors approved the Capital Raising Plan for the fiscal year 2025-26 amounting up to Rs 9,500 crore by way of Debt Instruments (Additional Tier I / Tier II Bonds)," the bank said in a stock exchange filing.
Subject to market conditions and regulatory approvals, the funds will be raised through Basel III-compliant bonds, with Rs 3,500 crore in Additional Tier I (AT1) bonds and Rs 6,000 crore in Tier II bonds.
Q4 earnings highlights
In Q4, Canara Bank's net profit increased by 33% year over year (YoY) to Rs 5,002.7 crore from Rs 3,757 crore the year before. At Rs 9,442 crore, net interest income (NII) increased slightly year over year by 1.4%.
Both the bank's operating profit and net interest income exceeded projections. Additionally, asset quality improved, as evidenced by the gross non-performing asset ratio dropping from 3.34% to 2.94% in the previous quarter. Net NPA dropped from 0.89% to 0.70%.
In the third quarter of FY25, the provision coverage ratio (PCR) climbed from 91.26% to 92.70%. Slippages slightly exceeded market expectations of Rs 2,650 crore, rising to Rs 2,702 crore from Rs 2,464 crore in the previous quarter.
Also Read: Canara Bank makes headlines as lender raises $300 million
Stock performance
According to Trendlyne, the average target price for Canara Bank is Rs 113, implying a potential 2% drop from current levels. The majority of the 17 analysts who are tracking the stock rate it 'Buy'.
The stock has increased by 40% in the last three months and by 15% in the past month. Canara Bank currently has a market capitalization of Rs 1,04,947 crore.
