# Canara Bank Flags Bond Yield Risk, Bets on Festive Credit Demand

> Canara Bank warns rising bond yields could hurt profits but expects strong festive loan demand.
- Title: Canara Bank Flags Bond Yield Risk, Bets on Festive Credit…
- Summary: Canara Bank warns rising bond yields could hurt profits but expects strong festive loan demand. Canara Bank faces mark-to-market risk from higher bond yields…
- Keywords: canara bank, bond yield, festive credit demand, housing loans, vehicle loans, net interest margin, treasury income, credit growth, news, india, Canara, Bank
- Source: mint — https://livemint.com/industry/banking/canara-bank-bond-yield-mtm-risk-credit-growth-11792467036668.html
- Author: Harsh Kumar
- Published: 2026-10-20T05:58:02+00:00
- Read time: 1 min
- Topics: canara bank, bond yield, festive credit demand, housing loans, vehicle loans, net interest margin, treasury income, credit growth, news, india
## Bond Yield Risk
Rising government bond yields pose mark-to-market provisioning risk for Canara Bank.

> Rising government bond yields pose a potential mark-to-market (MTM) provisioning risk for Canara Bank
## Yield Increase
10-year government bond yield rose from 6.75% in June to 7.38% in October 2026.

> The yield on the 10-year government bond has risen from around 6.75% in June to approximately 7.38%
## RBI Rate Impact
RBI's recent rate increase added pressure on bond yields, increasing MTM risk for banks.

> The RBI’s recent rate increase has added to the pressure on yields, increasing the potential mark-to-market (MTM) risk for banks
## Profit Impact
Canara Bank reported 8.4% year-on-year net profit rise to ₹5,175 crore in September quarter.

> Canara Bank reported an 8.4% year-on-year rise in net profit to ₹ 5,175 crore in the September quarter
## Treasury Decline
Treasury income fell 68.48% to ₹499 crore from ₹1,583 crore a year earlier.

> treasury income declined 68.48% to ₹ 499 crore from ₹ 1,583 crore a year earlier
## Credit Growth
Canara Bank expects sustained credit growth with 17.97% year-on-year advances growth.

> Canara Bank is currently recording year-on-year growth of 17.97% in advances and more than 14% in total business
## Festive Demand
Bank expects strong festive-season demand for housing and vehicle loans.

> Housing and vehicle loans are expected to benefit from stronger seasonal demand during the festive period
## Margin Protection
Bank maintained net interest margin at 2.55% with low slippages and minimal NPAs.

> The bank's net interest margin (NIM) stood at 2.55% in the September quarter
## Key takeaway

Canara Bank faces mark-to-market risk from higher bond yields but expects strong festive-season credit demand for housing and vehicle loans.