Canara Bank , one of India's leading public sector banks, has unveiled strategic moves to navigate the challenging interest rate environment and boost its financial position. The bank is set to offload excess priority sector loans and list two of its subsidiaries, as it grapples with margin pressures stemming from declining interest rates.

Priority Sector Loan Sale Strategy

Canara Bank has announced plans to sell its excess priority sector loans in the current quarter. This move comes as a response to the margin stress caused by falling interest rates. The bank's priority sector loans currently stand at 45.63% of its total loan portfolio, comfortably above the regulatory requirement of 40%.

MD K Satyanarayana Raju acknowledged that the bank's Net Interest Margin (NIM) guidance of 2.75% appears challenging in light of the Reserve Bank of India's (RBI) 100 basis point rate cut. With inflation dropping below 3%, expectations of further rate cuts are looming, potentially putting additional pressure on margins.

The strategy to sell excess priority sector loans has already shown promise. In the June quarter, Canara Bank earned a substantial Rs 1,248.00 crore in commission from priority sector loan sales, highlighting the potential of this approach to offset margin pressures.

Subsidiary Listing Plans

In a move to unlock value and potentially raise capital, Canara Bank has outlined plans to list two of its subsidiaries:

1. Canara Robeco AMC: The bank intends to sell a 13% stake in this asset management company.
2. Canara HSBC Life Insurance: A 14.5% stake dilution is planned for this life insurance venture.

Importantly, Canara Bank has stated its intention to maintain majority ownership in both subsidiaries post-listing, ensuring continued control over these strategic assets.

Strong Q1 Performance

Despite the challenging interest rate environment, Canara Bank reported robust financial results for the first quarter of the fiscal year:

• Net profit grew by 22% to Rs 4,752.00 crore
• Total income rose to Rs 38,063.00 crore

These figures underscore the bank's resilience and its ability to generate strong returns even in a difficult operating environment.

The combination of strategic loan sales, subsidiary listings, and solid financial performance positions Canara Bank to navigate the challenges posed by the current interest rate scenario while potentially unlocking new avenues for growth and value creation.

Canara Bank , one of India's leading public sector banks, has announced significant changes to its board of directors. The bank has re-elected Ms. Abha Singh Yaduvanshi and appointed Shri Gunjeet Singh Pannu as Shareholder Directors for a three-year term, effective from July 27, 2025, to July 26, 2028.

Re-election of Ms. Abha Singh Yaduvanshi

Ms. Abha Singh Yaduvanshi, aged 63, has been re-elected as a Shareholder Director. She has been serving on the bank's board since July 27, 2022. Ms. Yaduvanshi brings a wealth of experience to her role, having retired as Additional Secretary from the Lok Sabha Secretariat. Her educational background includes:

• BA Economics (Honours)
• MA Economics
• Post Graduate Diploma in Business Administration (PGDBA)

During her service, Ms. Yaduvanshi acquired extensive knowledge and experience in various sectors, including banking, finance, agriculture, and information technology.

Appointment of Shri Gunjeet Singh Pannu

Shri Gunjeet Singh Pannu, aged 63, has been newly elected as a Shareholder Director. His appointment brings valuable expertise to the bank's board. Shri Pannu's qualifications and experience include:

• B.Com, FCA (Fellow Chartered Accountant), and LLB
• Former Vice-President of the Income Tax Appellate Tribunal (ITAT)
• Over 39 years of experience as a practicing professional and in an adjudicatory capacity
• Rich and diverse experience in accountancy, finance, banking, direct taxes, and laws

Board Composition and Compliance

Both directors have been appointed under Section 9(3)(i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The bank has confirmed that neither Ms. Yaduvanshi nor Shri Pannu is related to any existing directors of Canara Bank.

In compliance with regulatory requirements, Canara Bank has declared that both directors are not debarred from holding the office of Director by virtue of any SEBI order or any other regulatory or statutory authority.

Outgoing Director

The bank also announced that Shri Bimal Prasad Sharma has ceased to be a Shareholder Director upon completion of his tenure on July 26, 2025.

These board changes reflect Canara Bank's commitment to maintaining strong corporate governance and bringing diverse expertise to its leadership team. The newly constituted board is expected to guide the bank in its future growth and strategic initiatives.