Further repo rate cuts could pressure NIMs
Management noted that additional rate cuts (2 more expected by market) could delay NIM recovery and make the 2.75-2.80% guidance difficult.
CANBK / Q1-FY26 / risks
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Canara Bank · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Material risks this quarter
high
SMA-2 exposures of INR 5,000 crore
Two large accounts (real estate and irrigation) in SMA-2 for six quarters; management provided INR 1,200 crore extra provisions but risk remains if they slip.
CASA ratio fell below 30%
CASA dropped to 29% due to institutional deposit outflows; management expects recovery but structural improvement remains a challenge.
PSLC income sustainability
PSLC volumes declined 30-40% YoY; higher yields compensated but sustainability of INR 1,200 crore quarterly run-rate is uncertain.