State-owned Canara Bank has approved a capital procurement plan to raise up to ₹8,500 crore through debt instruments during the 2026–27 fiscal year (FY27). The capital infusion is designed to strengthen the public-sector lender’s baseline capital adequacy ratio and create financial cushioning to sustain accelerating credit demand.
According to a regulatory filing submitted to the stock exchanges following a board meeting on June 2, the fundraising will be split across two categories of Basel III-compliant instruments. The bank intends to secure up to ₹4,500 crore through Additional Tier I (AT1) bonds and an additional ₹4,000 crore via Tier II bonds. The deployment remains contingent upon prevailing market conditions and necessary regulatory clearances.
Ahead of the board’s announcement, shares of Canara Bank closed 1.13 percent higher at ₹129.40 on the National Stock Exchange (NSE).
The structural balance-sheet expansion coincides with a significant transition in the bank’s executive leadership. Brajesh Kumar Singh officially took charge as Managing Director and Chief Executive Officer earlier this week, following a central government notification dated May 30. Singh, who previously managed corporate credit, retail banking, and strategic operations as Executive Director at Indian Bank, will lead Canara Bank through April 30, 2029.
The board’s decision to issue debt follows its financial earnings report for the final quarter of the preceding fiscal year, which wrapped up in March 2026. The data revealed a contraction in bottom-line profitability despite steady operational gains and strengthening portfolio health.
Canara Bank posted a net profit of ₹4,505 crore for the March quarter, representing a 9.9 percent decline compared to the corresponding period a year earlier. Executives attributed the dip primarily to a contraction in non-interest income streams. Conversely, the lender’s core net interest income climbed 4 percent year-on-year to hit ₹9,809 crore.
Crucially, the bank registered a sequential improvement in its risk profile. The gross non-performing asset (NPA) ratio lowered to 1.84 percent, down from the 2.08 percent recorded in the previous consecutive quarter. Net NPAs likewise tracked downward, finishing at 0.43 percent compared to 0.45 percent at the close of the December quarter, highlighting sustained progress in resolving bad loans.