Archive · 31 Oct 2025
Canara Bank CEO: Focus on Quality Lending Over Interest Rate Wars
Canara Bank's CEO announced that the bank won't compete in a race to offer the lowest interest rates on big business loans.
Instead, they want to focus on lending more money to regular people, farmers, and small businesses, aiming for a 60% share in these areas compared to 40% for big companies.
This is because offering very low interest rates on large loans can hurt the bank's profits.
The bank did see its net profit grow in the last quarter, but its income from loans and advances actually went down a little.
They plan to raise a lot of money soon to help the bank grow.
Canara Bank is also seeing good growth in loans for buying cars and homes.
They are also making it easier for customers to do business with them by moving more services, especially for small customers, to their online and mobile platforms.
Canara Bank CEO Satyanarayana Raju announced a strategy to avoid an 'interest rate war' in corporate lending, prioritizing quality growth and profitability.
The bank aims for a 60:40 mix between retail, agriculture, and MSME (RAM) loans and corporate loans, expecting faster growth in the RAM segment.
For Q2 FY26, Canara Bank reported a 19% year-on-year increase in net profit to ₹4,774 crore, but net interest income (NII) declined by 1.87%.
Canara Bank plans to raise ₹9,500 crore in FY26 through Tier II and AT1 bonds to support its growth.
The bank is experiencing strong growth in vehicle loans (around 25%) and housing loans (over 15%), and is digitizing its RAM portfolio, with 94% of transactions already digital.
- Who
- Satyanarayana Raju, Managing Director and CEO of Canara Bank
- What
- Stated the bank will avoid an 'interest rate war' on corporate loans, prioritizing a 60:40 mix of retail, agriculture, and MSME (RAM) to corporate lending for profitability and quality growth. Also reported Q2 FY26 net profit increase and NII decrease, with plans for capital raise and digital expansion.
- When
- October 31, 2025 (Publication Date); Q2 FY26 financial results
- Where
- India
- Why
- To maintain profitability and focus on quality growth amidst pressure on margins and rising funding costs.
- Net Profit (Q2 FY26)
- ₹4,774 crore
- Net Interest Income (Q2 FY26)
- ₹9,141 crore
- Net Interest Income (Q2 FY25)
- ₹9,315 crore
- Target RAM to Corporate Credit Mix
- 60:40
- Capital Raise Planned for FY26
- ₹9,500 crore
- Vehicle Loan Growth
- ~25% (Y-o-Y >100%)
- Housing Loan Growth
- >15%
- Digital Transactions Share
- 94%
Sources
Canara Bank profit up 19% as asset quality improves in Q2
Banks’ outstanding credit and deposit base decline on a fortnightly basis: RBI
Bandhan Bank’s Q2 net plunges 88% to ₹111.87 crore as provisions rise 90%
Canara Bank Q2 Results: Canara Bank reports 19% profit increase at ₹4,774 crore despite declining interest income
Bank credit grows 11.45%, show RBI data
Canara Bank Reports 19% Increase In Net Profit At ₹4,774 Crore Due To Declining Bad Loans
Aditya Birla Capital Reports 3% Increase In Net Profit At ₹855 Crore
Shriram Finance Q2FY26 results: Profit rises 7.47%, announces Rs 4.80 interim dividend
