Home / Business and Economy / RBI Nod: Canara Bank to Buy Back Rs 1,500 Cr Bonds
RBI Nod: Canara Bank to Buy Back Rs 1,500 Cr Bonds
15 Sep
Summary
- RBI permits Canara Bank to exercise call option on bonds.
- Bank's Q1 net profit rose 2.2% to Rs 4,856 crore.
- Gross NPAs declined to 1.57% in the June quarter.
Canara Bank has secured approval from the Reserve Bank of India (RBI) to exercise its call option on Basel III Additional Tier 1 (AT1) bonds valued at Rs 1,500 crore. The RBI's consent was conveyed via a letter, confirming the bank's ability to proceed with the buyback subject to existing terms and regulations.
This development coincides with the bank's strong first-quarter financial performance. For the June quarter of FY27, Canara Bank announced a net profit of Rs 4,856 crore, marking a 2.2% increase compared to the same period last year. This growth was underpinned by a healthy rise in net interest income and enhanced asset quality.
The bank reported a 13% year-on-year increase in net interest income to Rs 10,215 crore. Furthermore, asset quality metrics showed significant improvement, with gross non-performing assets (GNPA) falling to 1.57% from 1.84% in the previous quarter. Net NPAs also saw a reduction, settling at 0.36%.
Looking ahead to FY27, Canara Bank forecasts global advances to grow by 11-12% and global deposits to increase by 9-10%. The bank anticipates its global net interest margin (NIM) to be between 2.5-2.6%. Projections for asset quality indicate that global gross NPA will likely remain around 1.5%, with net NPA expected near 0.4% for the fiscal year.
