Credit Rating

Ref: SD: 255/256/11/12:2026-27 08.09.2026 The Vice President The Vice President BSE Limited Listing Department Phiroze Jeejeebhoy Towers National Stock Exchange of India Ltd Dalal Street Exchange Plaza Mumbai - 400 001 Bandra-Kurla Complex, Bandra [E] Scrip Code:532483 Mumbai - 400051 Scrip Code:CANBK Dear Sir/Madam, Sub: Credit Ratings by ICRA Ref: Disclosure under Regulation 30 of SEBI (LODR) Regulations, 2015 The Stock Exchanges are hereby informed that Bank received credit rating from ICRA (RatiInngs tArguemnceyn)t t oday i.eC. u08rr.0e9n.2t 0R2a6te ads Afomlloowusn:t Rating Action (Rs. crore) Basel III Tier I 11,000.00 [ICRA]AA+(Stable); Reaffirmed Bonds Basel III Tier I 4,500.00 [ICRA] AA+ (Stable); Assigned Bonds Basel III Tier II 8,500.00 [ICRA]AAA(Stable); Reaffirmed Bonds Basel III Tier II - [ICRA]AAA (Stable); reaffirmed and Bonds withdrawn Certificates of 20,000.00 [ICRA]A1+; Reaffirmed Deposit A copy of the credit rating rationale issued by ICRA (Rating Agency) is enclosed herewith. TThhiasn isk ifnorg yYoouur, i nformation and records. Santosh Kumar Barik Company Secretary प्रधान काया�लय Head Office F +91 80 22248831 112, जे सी रोड, ब�गलू� - 560002 112 J C Road, Bengaluru - 560002 T +91 80 22100250 E-Mail - hosecretarial@canarabank.com www.canarabank.bank.in September 08, 2026 Canara Bank: [ICRA]AA+ assigned to Basel III Tier I bonds; ratings reaffirmed Summary of rating action Previous rated Current rated Financial sector regulator# Instrument* amount amount Rating action (Rs. crore) (Rs. crore) Basel III Tier I bonds 11,000.00 11,000.00 [ICRA]AA+ (Stable); reaffirmed SEBI Basel III Tier I bonds - 4,500.00 [ICRA]AA+ (Stable); assigned SEBI Basel III Tier II bonds 8,500.00 8,500.00 [ICRA]AAA (Stable); reaffirmed SEBI [ICRA]AAA (Stable); reaffirmed Basel III Tier II bonds 3,000.00 - SEBI and withdrawn Certificates of 20,000.00 20,000.00 [ICRA]A1+; reaffirmed RBI deposit Total 42,500.00 44,000.00 *Instrument details are provided in Annexure I; #The Securities and Exchange Board of India’s (SEBI) grievance redressal/dispute resolution and SEBI investor protection mechanisms such as SCORES and ODR shall not be available for activities and instruments that fall under the regulatory purview of financial sector regulators (FSRs) other than SEBI Rationale The ratings continue to factor in Canara Bank’s (Canara) sovereign ownership and its strong franchise with a market share of 5.8% in net advances and 6.2% in total deposits as on March 31, 2026. As on June 30, 2026, it was the fourth largest public sector bank (PSB) and the sixth largest bank in the Indian financial system in terms of total business (cumulative advances and deposits). The ratings are further supported by Canara’s robust deposit franchise, resulting in a well-developed retail deposit base and a strong liquidity profile. The ratings also consider the bank’s robust profitability and strong capitalisation profile, which are expected to remain healthy, going forward. The capital position continues to be supported by the Government of India’s (GoI) track record of making timely capital infusions as well as Canara’s ability to raise capital from the market. While the bank’s net interest margin (NIM) remained under pressure in recent periods, a marginal improvement was seen in Q1 FY2027 at 2.15% vis-à-vis 2.09% in FY2026 (2.12% in Q4 FY2026). Going ahead, ICRA expects the surplus liquidity in the system to support the cost of funds, though the time lag in the deployment of the same profitably would impact margins in the near term. Thereafter, possible rate hikes would support the yields and hence the margins of the banking sector including Canara. Additionally, ICRA expects the bank to generate sufficient internal accruals to meet its growth capital requirements while keeping the desired capital cushions well above the regulatory levels {including capital conservation buffers (CCB)}. ICRA also notes that Canara expects an impact of Rs. 12,000-13,000 crore upon its transition to the expected credit loss (ECL) framework. Consequently, the effect on the reported CET I ratio, which stood at 12.91% as on June 30, 2026, is projected to remain manageable. The bank’s headline asset quality indicators continue to improve and the residual vulnerable book, comprising overdue (SMA- 1, SMA-2)1 and standard restructured advances, has reduced steadily over the last few years. Further, given the high provision coverage for legacy stressed assets, ICRA expects Canara’s asset quality and solvency position to remain healthy. Nonetheless, the asset quality will continue to be monitorable as the loan book seasons, given that the bank’s credit growth was high in the recent past. Additionally, uncertainty around the West Asia conflict could impact the asset quality and profitability profile. The 1 SMA is defined as a special mention account (SMA), which is an account exhibiting signs of incipient stress resulting in the borrower defaulting in the timely servicing of their debt obligations though the account has not yet been classified as an NPA as per the extant RBI guidelines; SMA-1 accounts are overdue by 31-60 days while SMA-2 accounts are overdue by 61-90 days www.icra .in Sensitivity Label : Public rating for the Tier I (AT-I) bonds factors in the healthy level of distributable reserves (DRs)2, which can be used to service the coupon on these bonds in the unforeseeable event of a loss. The Stable outlook on the ratings reflects ICRA’s expectation that the bank will be able to maintain a steady credit profile, with stable asset quality as well as healthy profitability and capitalisation. ICRA has reaffirmed and withdrawn the rating assigned to the Rs. 3,000.00-crore Basel III Tier II bonds as these have been fully redeemed with no amount outstanding against the same. The rating was withdrawn in accordance with ICRA’s withdrawal policy (click here for the policy). Key rating drivers and their description Credit strengths Sovereign ownership with demonstrated capital support from GoI – The GoI remains the bank’s largest shareholder with a 62.93% equity stake as on June 30, 2026. Following two rounds of equity capital infusion of Rs. 4,500 crore from the market in FY2021 and FY2022, the GoI’s shareholding had declined from 69.33% as on March 31, 2021. However, this provides enough headroom to raise capital from the markets if required. Given the bank’s comfortable capitalisation profile and access to capital markets, the GoI has not infused any equity capital in Canara over the last four fiscals. Canara and Syndicate Bank (e-SB), which merged with Canara, had received sizeable equity capital support from the GoI, amounting to Rs. 18,234 crore, during FY2018- FY2020. Recapitalisation and improving internal accruals over the years have helped the bank reduce its net non-performing advances (NNPAs) substantially. ICRA believes that Canara has comfortable capital cushions and is likely to remain self- sufficient for its capital requirements, though it will continue receiving support from the GoI if required. Comfortable capital position and solvency – The bank’s core equity capital (CET I) and Tier I capital stood at 12.91% and 15.00%, respectively, as on June 30, 2026 (12.29% and 14.58%, respectively, as on June 30, 2025), maintaining a buffer over the regulatory ratios. With the enhanced capital position and the decline in the NNPA level, NNPA/core capital improved to 4.23% as on June 30, 2026 from 7.29% as on June 30, 2025. In ICRA’s view, Canara remains well placed for growth, in terms of its capital position, while absorbing any incremental stress and maintaining more than the desired cushion of 1% on the capital above the regulatory levels. ICRA also notes that the bank expects an impact of Rs. 12,000-13,000 crore upon its transition to the ECL framework. Consequently, the effect on the reported CET I ratio is projected to remain manageable. Besides this, the subsidiaries largely remain self-sufficie [Showing first 8,000 characters — download PDF for full document]