Bengaluru-based public sector lender Canara Bank expects to surpass its deposit growth guidance of 9%. Managing Director and Chief Executive Officer K Satyanarayana Raju said that the current focus is less on attracting deposits and more on the cost of mobilisation.

Raju expects an 11% growth in advances for the January-March 2025 quarter, surpassing its earlier guidance of 10%. Net interest margins (NIMs) are expected to be around 2.8%, he said, adding that a lot depends on the liquidity announcement by the Reserve Bank of India (RBI) for the quarter.

The RBI on January 27 announced measures to manage market liquidity, including ₹60,000 crore in open market operations (OMO) purchases of government securities. These will occur in three ₹20,000 crore tranches on January 30, February 13, and February 20, 2025.

If market liquidity improves, deposit rates could soften, positively impacting the net interest income (NII). However, in the absence of significant liquidity improvements, the current NII level is expected to persist, Raju noted.

In October-December 2024 quarter (Q3FY25), the bank reported net profit at ₹4,104 crore, and the bank’s deposits grew by 8.44% and net interest income (NII) came in at ₹9,149 crore.

In the October-December 2024 quarter, the bank secured ₹653 crore through various resolutions via the National Company Law Tribunal (NCLT). For the current quarter, it expects recoveries between ₹600 crore and ₹700 crore through similar resolutions.

The bank anticipates that recoveries will significantly exceed slippages.

Canara Bank’s current market capitalisation is ₹82,951 crore. Its shares have declined 3% over the last year.