• Deposit growth outlook: Year-on-year deposit growth is currently above 12% and is expected to remain sustainable in the 11% to 12% range, despite Q4 figures ending at 9.71% due to missing last-minute corporate and government inflows.
• Margin sustainability: Net interest margin improved quarter-on-quarter by 9 basis points to 2.54% as deposit costs fell 8 basis points, and management expects NIMs above 2.5% to remain sustainable going forward.
• ECL provision impact: Canara Bank expects an ECL provision requirement of roughly ₹10,000 crore, which it plans to absorb within one to two years against annual profits of ₹19,000–20,000 crore while maintaining a CET ratio of around 12%.
• Operating profitability and ROA: Sequential declines in operating profit and an ROA moderation to 1% were driven by weak treasury performance and the absence of one-off subsidiary sales, but recoveries from treasury, TWO, and PSLC income are expected to keep ROA above 1%.