Canara Bank: Record Profit, Rising Dividends

Canara Bank, India's sixth-largest public sector bank, achieved a record net profit of ₹19,187 crore in FY26. Over the past five years, the bank's revenue grew at a 12% CAGR, while its net profit surged at a more impressive 44% CAGR, demonstrating robust financial performance. This profitability is underpinned by strong asset quality, with Gross Non-Performing Assets (NPAs) at 1.84% and Net NPAs at 0.43% as of FY26.

The bank's total business reached ₹28.06 lakh crore in FY26, with global advances growing by 15.3% and deposits by 9.7%. Despite a slight contraction in Net Interest Margin (NIM) to 2.51%, net profit increased by 12.7%. Canara Bank's commitment to shareholders is evident in its dividend policy; the Board recommended a ₹4.20 per share dividend for FY26, translating to a 3.5% yield.

Historically, Canara Bank resumed dividend payments in FY22 after a gap due to the bad loan cycle. Its improved asset quality, with NPAs reaching multi-year lows, and a high Provision Coverage Ratio (PCR) of 94.21%, insulate future earnings. The bank's Capital Adequacy Ratio (CRAR) stood at 17.04% in FY26, well above regulatory minimums, ensuring capacity for lending and dividend payouts.

Looking ahead to FY27, Canara Bank targets 10-11% growth in total global business and aims to further improve asset quality with Gross NPA projected at 1.50% and Net NPA at 0.40%. The bank's dividend payout adheres to CPSE guidelines, with a minimum of 20% of net profit and a regulatory ceiling of 75%, while also allocating 25% to statutory reserves. Retaining over 80% of earnings allows for future lending and balance sheet strengthening.