CEO of Canara Bank expects the growth of corporate loans to record in the second half of FY26

Copyright © HT Digital Streams Limit all rights reserved. Shayan Ghosh 3 min read May 12, 2025, 11:11 am Ist Canara Bank remains conservative in its approach to non-banking financial enterprises or NBFCs. (Reuters) Summary Canara Bank expects the second half of the financial year to see some revival in the demand for corporate loans. He also said the question was limited to sectors where it was seen this past financial year. Mumbai: Canara Bank, state -owned Canara Bank, sees another secular revival in corporate credit growth, with the demand limited to infrastructure, renewable energy and certain manufacturing segments, a senior executive said in the hope that the rate cut would cause and lead to more loans by companies. CEO K. Satyanarayana Raju said in an interview that the bank expects the second half of the financial year to see some revival in corporate loans demand. He said the question was limited to sectors where it was seen in the past financial year. “We will tread in infrastructure, roads, green energy, data center creation, real estate (both residential and commercial), manufacturing units such as solar panels, steel and cement,” he said. The Bengaluru headquarters bank has a 9.8% growth at a year-on-year (yoy) in a segment that classifies it as ‘corporate and others’, higher than loans for 8.2% grown. At £ 4.6 billion were ‘loans of’ corporate and other ‘43% of the total progress of £ 10.7 trillion on March 31. “Even now, we will grow our corporate loan book by 10%,” Raju said. “That’s why our loan book ratio is about 42:58 to be our corporate to retail, agri, MSME-(micro, small and medium enterprises) loan book ratio.” By comparison, the largest borrower State Bank of India (SBI) in India witnesses a 9% growth in corporate progress, although on a significantly larger basis. For the largest money lender HDFC Bank, a lender in the private sector, the book ‘Corporate and other wholesale’ has shrunk 3.6% yoy. Read also | Upcoming terms rules shed shade across the Indian banks in Canara Bank Outlook, is now awaiting a revival in corporate credit for several quarters. Bankers have said in the past that companies, especially the big ones, are now more aware of debt and would rather use their internal growth to finance capital spending, if any. That said, private Capeex or capital expenditure has abandoned the expectations and expenses by the government, which apparently does the heavy lifting. Mint reported on April 1 that announcements of new projects-a proxy for spending-skewer were in favor of the government with a year-on-year increase of 117%. In contrast, the private sector had a successive 89% increase, but only a modest 3.3% increase compared to a year earlier, the report states, citing provisional data from the Center for Monitoring Indian Economy (CMIE). Meanwhile, like many of its peers, Canara Bank is conservative in its approach to non-banking financial enterprises or NBFCs. Raju said that a few years ago NBFCS accounted for 16-17% of the bank’s total loans that fell over time. Read more | Lower capital requirements for bank loans to NBFCs to facilitate financing misery. “It has fallen to 12%now. In absolute numbers we are almost stagnant,” Raju said, adding that the bank still lends to NBFCs, it does not want to jeopardize the quality of the promoters, the quality of the company and the price of the loan. “It’s not that we just lend for the sake of a topline. We stopped the kind of lending. ‘ The NBFC book of Canara Bank stood at £ 1.4 trillion on March 31, with 4.7% years old, but was 3.2% lower consecutive. Analysts said the bank’s earnings for the three months beat expectations. According to analysts at Motilal Oswal Financial Services, Canara Bank reported a healthy quarter with earnings driven by net income, healthy other income, controlled operating expenses and lower than expected terms. The bank reported an improvement in NIMs, mainly driven by better returns of progress, along with the steady cost of funds, it says. “We retain our forecasts and estimate that Canara Bank produces a FY27 ROA/Roe (yield on assets/yield on equity) of 1.0%/18%,” Motilal Oswal analysts said in a note on May 8. Read also | NBFCs turn to other ways, as bank credit delays over repeated RBI alerts, all the industry news, bank news and updates on live mint. Download the Mint News app to get daily market updates. More Topics #Canara Bank Mint Specials