Canara Bank IND AAA Rating Affirmed; AT1 Bonds at IND AA+ | Gross NPA 2.08%

Mumbai, February 13, 2026: Canara Bank has received a rating affirmation from India Ratings & Research (Ind-Ra) , with the agency maintaining its IND AAA/Stable issuer rating. The public sector lender informed stock exchanges today about the rating action, which covers its infrastructure bonds, Basel III Tier 2 instruments, and AT1 bonds.

Rating Actions Summary

Key Highlights

• Gross NPA improved to 2.08% (from 2.94% in FY25)

• Net NPA at 0.45%

• CET1 ratio up to 12.37%

• Return on Assets (RoA) at 1.13% in 9M FY26

• Provision coverage ratio at 78.6%

Why IND AAA Matters

The IND AAA rating is India Ratings' highest grade, indicating lowest credit risk. For investors, Canara Bank's bonds are among the safest investment options.

Key Rating Drivers:

• High systemic importance – Fourth largest PSB in India

• Strong government support – High likelihood of GoI backing

• Improving profitability – Internal accruals enhancing capital buffers

• Asset quality revival – Gross slippages reduced to 0.64%

AT1 Bonds: What Investors Should Know

AT1 bonds carry a IND AA+ rating, one notch below the issuer rating. This reflects their unique loss-absorption features, including coupon omission risk and write-down/conversion risk.

Management Outlook

The bank expects:

• NIM recovery to 2.75%-2.80% in FY26

• Credit cost to remain around 1.0%

• Gross NPA guidance at 2.5% for FY26

Why This Matters

• For Bond Investors: Highest safety rating reaffirmed

• For Equity Investors: Strong fundamentals support long-term growth

• For Depositors: IND AAA rating reinforces confidence in bank stability