From mint · Harsh Kumar · · 1m 10s
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.
In brief
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 but expects strong festive-season credit demand for housing and vehicle loans. Originally reported by mint.
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”
In short
Canara Bank faces mark-to-market risk from higher bond yields but expects strong festive-season credit demand for housing and vehicle loans.
