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Canara Bank is looking to carry its double-digit business growth into the rest of FY27, with MD & CEO Brijesh Kumar Singh expecting the lender to outperform its 10–11 per cent growth guidance while ruling out a squeeze on net interest margins. The bank’s global business grew 15.88 per cent year-on-year to ₹30.72 lakh crore, while its net interest margin is expected to edge up from 2.55 per cent as the lender leans on granular deposits and advances to sustain momentum.

Individual savings deposits rose 11.7 per cent and retail term deposits grew 17.17 per cent, providing funding support for the bank’s expansion. In an interaction, Singh outlined the levers underpinning growth in the coming quarters.

Net interest income grew 20 per cent y-o-y, while net profit rose 8 per cent. Can the core banking business sustain this momentum without a recovery in treasury income?

Our core business is net interest income (NII). Average advances continue to grow, underwriting remains calibrated, and stress in the book is minimal, with gross NPAs at 1.33%. We are controlling costs and deploying resources into good-yielding advances. NII has grown consistently quarter-on-quarter since September 2025, and we expect it to improve further.

Treasury earnings move in cycles, and these tend to even out over the longer term. The bank has also increased provisions, which have weighed on earnings, but the core banking business continues to grow at a healthy pace.

Retail, agriculture and MSME lending are growing faster than overall advances. Are you pricing aggressively to gain market share?

Pricing is driven by market forces. If you price too high, you lose business; if you price too low, earnings suffer. The difference between lenders is generally limited. Our risk-adjusted returns are good, and retail lending offers diversification. Quarterly slippages were 0.15 per cent, while annualised slippages are around 0.5-0.6 per cent.

Our credit cost is 0.47 per cent, and we expect to keep it below 0.5 per cent. We are also seeing lower risk concentration, with 87 per cent of borrowers with exposures of ₹50 crore and above rated A or better.

Net interest margin (NIM) stood at 2.55 per cent. Is this the floor for the second half?

Our guidance is 2.5-2.6 per cent, and we are maintaining it. We do not expect contraction going forward. NIM should improve by a few basis points, and we are confident of protecting margins.

With advances growing faster than deposits, how are you strengthening your deposit franchise?

Branches remain our primary source of business growth. We plan to open 250 branches this fiscal year, of which 45 have already opened. Individual savings deposits are growing 11.7 per cent, while retail term deposits have increased 17.17 per cent. We are building granular deposits rather than relying on bulk deposits, which we are controlling.

Fintechs are collaborators rather than competitors, and they support several of our digital products.

Does the proposed UPI merchant discount rate offer a meaningful revenue opportunity for banks?

Around 96 per cent of UPI transactions by volume are below ₹2,000. There are also exemptions and a cap on the fee, which is shared among several participants, including issuing and acquiring banks and payment service providers. Canara Bank operates across these roles and has its own payment platform.

However, we have not calculated the overall revenue opportunity, and we do not expect a significant impact.

What is your expectation about the festive quarter? What are you seeing in consumption demand?

The third quarter is festive, so there will be significant demand from retail lending and consumption-driven borrowing. We have established products and processes, and our pricing, promotions, and placements are calibrated well. We are upbeat about the coming quarter and subsequent quarters.

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