Canara Bank (CBK IN) – Q3FY26 Result Update – NIM and deposit growth remain key drivers – HOLD
Published on 30 Jan 2026
CBK saw a soft quarter as NII/NIM and deposit growth were a miss while TWO recovery and lower asset quality cushioned core PAT. Reported NIM fell by 5bps QoQ to 2.45% despite healthy retail asset growth, CRR cut and rise in LDR. NIM level remains sub-par to peers (2.7-3.1%) which is dragging core RoA. While management has guided to loan growth of 12-13%, deposit growth (has been weak) remains a key growth driver since bank has reached LDR of 77%. Asset quality remains a silver lining with improving trend in net slippage leading to lower credit costs. Bank expects ECL transition impact to be Rs100bn to be spread over 4 years which may not materially change provision estimates. NIM and deposit growth remain key monitorables. With core RoA of 0.7x, valuation is 1.0x on FY28 ABV. We maintain a multiple of 1.1x on FY28 ABV to arrive at a TP of Rs160 keep our ‘HOLD’ rating.
