Synopsis: Canara Financial institution and Federal Financial institution each noticed investor reactions after the Q2 FY26 outcomes had been declared. Nonetheless, Canara Financial institution’s profitability was robust and Union Financial institution maintained robust asset high quality.
On this article, we’ll examine two of the main PS banks, particularly Canara Financial institution and Union Financial institution of India, throughout key parameters like profitability, asset high quality, deposits, and advances and many others, and ultimately, we’ll take a look at which one of many two carried out higher.
Income and Profitability
Canara Financial institution reported a Web Curiosity Revenue (NII) of Rs 9,141 crore in Q2 FY26, representing a 1.87 p.c decline from Rs 9,315 crore in Q2 FY25. Nonetheless, it recorded a development of 1.47 p.c from its earlier quarter determine of Rs 9,009 crore.
Coming to its profitability entrance, Canara Financial institution reported a internet revenue development of 19 p.c to Rs 4,774 crore in Q2 FY26 as in comparison with Rs 4,014 crore in Q2 FY25. Moreover, on a quarterly foundation, it recorded a slight development of 0.46 p.c from Rs 4,752 crore.
Then again, Union Financial institution of India reported a Web Curiosity Revenue (NII) of Rs 8,812 crore in Q2 FY26, which is a decline of two.6 p.c from Rs 9,047 crore in Q2 FY25. Moreover, it recorded a decline of three.3 p.c from its earlier quarter determine of Rs 9,113 crore.
Coming to its profitability entrance, Union Financial institution of India reported a internet revenue decline of 10 p.c to Rs 4,249 crore in Q2 FY26 as in comparison with Rs 4,720 crore in Q2 FY25. Nonetheless, on a quarterly foundation, it recorded a slight development of three p.c from Rs 4,116 crore.
General, Canara Financial institution clearly outperformed Union Financial institution throughout the interval, because it reported the next internet revenue development of 19 p.c as in comparison with Union Financial institution’s decline of 10 p.c throughout the identical interval.
Asset High quality
Canara Financial institution’s asset high quality strengthened throughout the interval. GNPA declined by 138 bps to 2.35 p.c as in comparison with 3.73 p.c in Q2 FY25. Additionally, NNPA declined by 45 bps and presently stands at 0.54 p.c as in comparison with 0.99 p.c in Q2 FY25.
Provision Protection Ratio elevated by 270 bps to 93.59 p.c. Credit score price additionally declined by 29 bps to 0.68, and the Slippage ratio additionally declined by 6 bps to 0.19 p.c throughout the identical interval.
Then again, Union Financial institution of India’s asset high quality additionally adopted the identical development. GNPA decreased by 107 bps to three.29 p.c as in comparison with 4.36 p.c in Q2 FY25. Additionally, NNPA decreased by 43 bps and presently stands at 0.55 p.c as in comparison with 0.98 p.c in Q2 FY25.
Provision Protection Ratio elevated by 234 bps to 95.13 p.c. Credit score price ratio additionally declined by 87 bps to 0.22 p.c, and the Slippage ratio declined considerably by 149 bps to 0.91 p.c throughout the identical interval.
The enhancements had been seen in each banks, however Union Financial institution of India carried out a bit of higher, because it carries fewer non-performing loans, has the next provision protection ratio, and a extra important lower in slippages. On the whole, Union Financial institution’s asset high quality and threat administration appear to be a bit of higher than Canara Financial institution’s this quarter.
Deposits and Advances Development
Canara Financial institution’s complete deposits grew by 13.4 p.c to Rs 15,27,922 crore in Q2 FY26 as in opposition to Rs 13,47,347 crore in Q2 FY25. CASA deposits had been Rs 4,28,115 crore, with present account deposits at Rs 75,920 crore and Financial savings Account deposits at Rs 3,52,195 crore. CASA deposits accounted for 28 p.c of the full deposits as of September 30, 2025.
Coming to complete advances, it has a complete mortgage ebook of Rs 11,51,041 crore, which grew by 14 p.c YoY and 5 p.c QoQ, the place 58 p.c of its mortgage ebook is uncovered to RAM (Retail, Agriculture, and MSME) and the remaining 42 p.c to Company & others.
Then again, Union Financial institution of India’s complete deposits have elevated by 2 p.c to Rs 12,34,621 crore in Q2 FY26 as in opposition to Rs 12,11,603 crore in Q2 FY25. CASA deposits had been Rs 4,01,854 crore, with present account deposits at Rs 63,010 crore and Financial savings Account deposits at Rs 3,38,844 crore. CASA deposits accounted for 32.56 p.c of the full deposits as of September 30, 2025.
Coming to complete advances, it has a complete mortgage ebook of Rs 9,75,207 crore, which grew by 5 p.c YoY and 0.07 p.c QoQ, the place 57 p.c of its mortgage ebook is uncovered to RAM (Retail, Agriculture, and MSME) and the remaining 33 p.c to LC & Others.
Canara Financial institution outperformed Union Financial institution by way of development of each deposits and loans. Though Union Financial institution saved the next CASA ratio, Canara’s faster enlargement in advances and deposits is indicative of a more healthy enterprise development.
Different Key Ratios
Canara Financial institution reported a Web Curiosity Margin of two.52 p.c, which declined 36 bps YoY and three bps QoQ. It reported a strong ROE and ROA of 20.56 p.c and 1.12 p.c respectively. Value to Revenue elevated by 51 bps YoY and by 20 bps QoQ to 46.97 p.c.
Then again, Union Financial institution of India reported a Web Curiosity Margin of two.67 p.c, which declined 23 bps YoY and by 9 bps QoQ. It reported an ROE and ROA of 15.08 p.c and 1.16 p.c respectively. Value to Revenue additionally elevated considerably by 709 bps YoY and by 146 bps QoQ to 50.65 p.c.
Each Canara Financial institution and Union Financial institution of India delivered regular performances in Q2 FY26; nevertheless, Canara Financial institution emerged barely stronger total. It confirmed higher revenue development, quicker enlargement in deposits and advances, and maintained greater return ratios regardless of minor margin stress.
Union Financial institution, then again, demonstrated superior asset high quality enchancment and threat management. Nonetheless, contemplating Canara’s stronger profitability and development momentum, it seems to be the higher performer this quarter.
Written by Satyajeet Mukherjee
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