Canara Bank receives 'CARE AA+; Stable' rating for Tier I Bonds, 'CARE AAA; Stable' reaffirmed for other instruments
Canara Bank's Tier I bonds rated 'CARE AA+; Stable', while other debt instruments reaffirmed 'CARE AAA; Stable' by Care Ratings, reflecting strong financials and GoI support.
Credit ratings are critical for a bank's funding costs, capital raising ability, and overall market confidence. The high ratings and stable outlook reaffirmed by Care Ratings provide a strong positive signal to investors and lenders, reducing perceived risk and potentially lowering borrowing costs for the bank.
The assignment of a 'CARE AA+; Stable' rating for Tier I Bonds and the reaffirmation of 'CARE AAA; Stable' for other significant debt instruments, coupled with a 'Stable' outlook, indicates strong creditworthiness and positive market perception for Canara Bank. Improved asset quality and profitability also contribute to the positive sentiment.
* Canara Bank received credit ratings from Care Ratings Limited on November 6, 2025, for various instruments: * Tier I Bonds of ₹3,500 crore were assigned 'CARE AA+; Stable' rating. * Infrastructure Bonds of ₹10,000 crore and another ₹10,000 crore, Tier II Bonds of ₹750 crore (reduced from ₹2,150 crore), Tier II Bonds of ₹2,500 crore, and Tier II Bonds of ₹4,000 crore were all reaffirmed 'CARE AAA; Stable'. * Ratings for certain Tier II Bonds (ISIN: INE476A08076, INE667A08021, INE667A08039) were withdrawn due to redemption or exercise of call option. * The ratings derive strength from the bank's established retail franchise, strong network, comfortable capital adequacy, and improved profitability over the last three years. Majority ownership by the Government of India (GoI) and its demonstrated capital support are also key factors. Canara Bank is the fourth largest Public Sector Bank (PSB) in terms of asset size as of September 30, 2025. * These strengths are partially offset by a relatively low Current Account and Savings Account (CASA) ratio compared to peers and moderate, albeit improving, asset quality levels. CareEdge Ratings expects the bank's Net Interest Margin (NIM) to witness pressure in FY26. * As of September 30, 2025, Canara Bank's total business stood at ₹26.79 lakh crore, with deposits of ₹15.28 lakh crore and gross advances of ₹11.51 lakh crore. The bank reported a Capital Adequacy Ratio (CAR) of 16.20% with a Common Equity Tier (CET) I Ratio of 12.21%. In October 2025, the bank reduced its shareholding in Canara HSBC Life Insurance Company Limited and Canara Robeco Asset Management Company Limited, realizing approximately ₹2,150 crore. * The bank's net profit increased by ~17% to ₹17,027 crore in FY25 (from ₹14,554 crore in FY24) and to ₹9,526 crore in H1FY26 (from ₹7,919 crore in H1FY25). Gross NPA ratio improved to 2.35% and Net NPA ratio to 0.54% as of September 30, 2025. Provision Coverage Ratio (PCR) stood at 93.59%. CASA ratio stood at 28.02% as of September 30, 2025. * The outlook on the ratings is 'Stable', reflecting CareEdge Ratings' expectation of continued steady growth, stable asset quality, and comfortable capitalization in the medium term.
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Canara Bank filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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