Canara Bank FY24 Annual Earnings Summary
4 quarters covered · ₹0 Cr revenue · ₹14,554 Cr PAT · 0.0% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Promise tracking available after 2+ quarters of coverage.
Risks flagged during the year
Management acknowledged stress on margins due to higher interest expenses on deposits, which could persist if liquidity remains tight.
Q1 FY24 · mediumAnalyst raised concern that PSLC income, which contributed significantly in Q1, will taper off in later quarters, impacting profitability.
Q1 FY24 · mediumSlippages in Q1 were concentrated in MSME (₹1,380 crore) and agriculture (₹800 crore), with SMA book elevated due to seasonal factors.
Q2 FY24 · mediumElevated term deposit rates (7.25% special scheme) may pressure NIM, potentially falling to 2.9% if liquidity remains tight.
Q2 FY24 · mediumA single large LRD account (mall) under SMA-2 has been provisioned INR 650 crore; if it slips to NPA, recovery may be slow despite collateral.
Q3 FY24 · mediumManagement acknowledged that cost of deposits is rising and NIM may face pressure, though they aim to keep it near 3%.
Q3 FY24 · mediumCASA growth (5.05% YoY) lags deposit growth (8.55%), impacting funding costs. Management has launched campaigns but no near-term target given.
Q3 FY24 · mediumFresh slippages of INR 2,697 crore were largely from MSME (INR 1,200 crore) and agriculture (INR 1,000 crore), which could persist.
Q4 FY24 · mediumNew RBI guidelines on project implementation could increase provisioning requirements, though management is confident of managing the impact.
Q4 FY24 · mediumStaff costs rose sharply due to bipartite settlement arrears and actuarial provisions; normalization expected from Q1 FY25.
Q2 FY24 · lowRecovery from NCLT-referred accounts remains slow, with most resolutions via liquidation, limiting recoveries.
Q2 FY24 · lowBipartite settlement arrears from Nov 2022 could create a one-time expense shock; bank has provisioned INR 1,150 crore so far.
What changed through the year
Q1 FY24 · NIM guidance above 3% for FY24
Management guided for net interest margin to remain above 3%, with Q1 NIM at 3.05%.
Q1 FY24 · Credit growth of 12-14% for FY24
Management expects loan growth in the range of 12-14% for the full year, with Q1 domestic credit growing over 3%.
Q1 FY24 · Gross NPA target of 4.50% by end of FY24
Management guided for gross NPA to decline to 4.50% by March 2024.
Q1 FY24 · PCR to cross 90%
Management aims to increase provision coverage ratio to above 90% through additional provisions each quarter.
Q2 FY24 · NIM expected in 2.9%-3.05% range
Management guided NIM between 2.9% and 3.05% for coming quarters, depending on liquidity conditions.
Q2 FY24 · Loan growth target of 12% for FY24
Management expects advances to grow around 12% for the full year, driven by RAM segment.
Q2 FY24 · PCR target of 90% by end of FY24
Management aims to increase provision coverage ratio to 90% by March 2024.
Q2 FY24 · Credit cost guidance of ~1%
Management expects credit cost to remain around 1% until PCR reaches 95%.
Q3 FY24 · Full-year credit growth of ~12%
Management expects domestic advances to grow around 11.5-12% for FY24, driven by RAM and selective corporate lending.
Q3 FY24 · Cost-to-income ratio below 45% by March 2024
Despite one-time wage provisions, management is confident of achieving cost-to-income below 45% by Q4 FY24.
Q3 FY24 · NIM to be maintained near 3%
Net interest margin is expected to remain close to 3% despite pressure from rising deposit costs.
Q3 FY24 · Capital raising of INR 6,100 crore in next two months
Bank plans to raise remaining AT1 and Tier 2 bonds of INR 6,100 crore when market conditions are favorable.
Q4 FY24 · Credit growth of ~12% for FY25
Management guided for 10% minimum but expects to achieve around 12% credit growth, driven by RAM and selective corporate lending.
Q4 FY24 · NIM to be maintained at 2.95%-3% for FY25
Despite tight liquidity, management expects NIM to remain in the 2.95%-3% range, with potential upside if liquidity eases.
Q4 FY24 · CASA ratio target of 33% by FY25
Management aims to achieve 33% CASA ratio by end of FY25 through new products and digital initiatives.
Q4 FY24 · Cost-to-income ratio to be maintained around 47%
Management expects to keep cost-to-income ratio at or below 47% despite wage revision and IT investments.