Canara Bank Chairman Speech

Dear Shareholders,

With great pleasure and immense gratitude, I present to you the highlights of our Bank''s performance for the financial year 2025-26.

First and foremost, I extend my deepest appreciation to each of you for your unwavering support and trust, which has played a pivotal role in our Bank''s distinguished journey over the years and has enabled us to achieve yet another year of significant achievements, driven by our commitment to sustainable growth, innovation, and continuous value creation. I wish you all the best of health and spirits.

FY 2025-26 was a mixed bag, as far as global macroeconomic landscape was concerned, presenting both challenges and opportunities in its wake. On the positive note, global economy exhibited resilience, displaying gradual strengthening of growth impulses accompanied by stable inflation despite the imposition of tariffs by the US. Nevertheless, challenges persisted, primarily driven by escalating geopolitical conflicts, disruptions in trade routes, and cautious monetary policy stances maintained by global Central Banks. Challenges intensified in the second half due to territorial ambitions displayed by the US administration, given the intention to annexe Greenland after ensuring a regime change in Venezuela. Moreover, the new US regime also reneged on its commitment to free trade and adopted protectionism, imposing reciprocal tariffs on its trading partners, raising the prospects of stagflation across the globe.

International Monetary Fund (IMF) latest growth projections (April 2026 World Economic Outlook) show a resilient but fragile global economy, as global GDP growth has been estimated at approximately 3.4% in 2025, before moderating to 3.1% in 2026 and 3.2% in 2027 under the assumption of a contained geopolitical conflict. Inflationary pressures, which had eased through much of 2025, witnessed renewed upside risks due to higher energy prices and supply-side disruptions.

On the domestic front, the economy continued to remain robust, with real GDP growth set to touch 7.5% in FY26 buoyed by robust growth in agriculture and services sectors though growth in manufacturing sector continues to be modest. GDP growth rate for the last quarter of FY26 is expected to be closer to 7.5% buoyed by consumption and public investment. Private consumption which was a major cause for worry has begun showing green shoots facilitated by rise in purchasing power on account of reduction in goods and services taxes. Exports have also done well with merchandise and services exports crossing the $800 billion mark. This was possible even in an environment of heightened tariffs by the US due to effective trade diversification and the series of free trade agreements with major trading partners.

However, India cannot be fully immune to shocks created due to the West Asian crisis. The blockade of the Strait of Hormuz and refinery outages in the Gulf has impacted oil and gas supplies, which could impinge on growth and inflation. Hospitality and tourism, logistics, shipping, fertilisers, restaurants, granules are some of the sectors, to name a few, which could be impacted. Remittances could also be impacted if the conflict prolongs.

Despite multiple headwinds, major international agencies forecast Indian economy to grow around 6.5% in FY27. Our economy also draws strength from robust public capital expenditure and healthy corporate & Bank balance sheets. The increasing emphasis on semiconductors, electronics and Artificial Intelligence capabilities is expected to spur innovation and growth. India is also emerging as a major player in defence, renewable energy and space technology. Moreover, India is fast emerging as a hub for global capability centres and data centres generating huge employment opportunities. The shift in global economic landscape is set to immensely benefit sectors like textiles, semiconductors, auto components, pharmaceuticals, footwear and toys. Monsoon, however, is likely to be below normal with the India meteorological Department (IMD) forecasting monsoon at 92% of the Long Period Average (LPA). Considering these domestic and global macroeconomic factors, the Reserve Bank of India (RBI) has projected real GDP growth at 6.9% for FY 2027.

The Indian Banking sector remained sound and resilient in FY 2026 with continued improvement in asset quality, enhanced provisioning for bad loans, sustained capital adequacy and rise in profitability. Though the new Expected Credit Loss (ECL) norms will kick in banks are well capitalised to absorb the extra capital requirements. Favourable domestic macroeconomic conditions have fuelled credit growth of 15% for FY26. However, headwinds remained from deposit growth lagging behind credit expansion, thereby intensifying competition for deposits among Banks. Tight liquidity conditions in the Banking system for the most part of FY25 also constrained margins of banks as they had to endure higher cost of funds.

Despite the challenges, I am delighted to announce that our global business surpassed ''28 Lakh Crores with a robust 12.11% y-o-y growth in Net Profit to ''19,187 Crores (12 Months).

Further, the Board of Directors of the Bank have recommended a dividend of ''4.2/- per equity share (i.e. 210%) of face value of ''2/- each to the Shareholders for the year 2025-26, subject to the approval of the Shareholders at the AGM. This is as compared to the dividend of ''4 per equity share distributed for FY 2024-25 and is testimony to our commitment to value creation for our esteemed Shareholders.

I am delighted to place before you the highlights of our Bank''s performance during FY 2025-26, accompanied by details regarding the achievements and initiatives undertaken by our esteemed institution.

KEY PERFORMANCE OF THE BANK

BUSINESS

During FY 2025-26, the global business of the Bank grew to ''28,06,226 Crores, up by 12.11% y-o-y with global deposits growing at a pace of 9.71% y-o-y to ''15,68,678 Crores and global advances growing by 15.30% y-o-y to ''12,37,548 Crores. The enhanced thrust on domestic business resulted in the growth of 11.04% y-o-y to ''25,98,048 Crores with domestic deposits growing by 7.95% y-o-y to ''14,36,905 Crores and domestic advances growing by 15.12% y-o-y to ''11,61,143 Crores. As at March 2026, Retail Term deposits registered a growth of 9.33% y-o-y to ''5,81,851 Crores. Also, as at March 2026, CASA deposits are at ''4,28,804 Crores with savings deposits at ''3,66,581 Crores and current deposits at ''62,223 Crores. The domestic CASA ratio of Bank stood at 29.84% as on March 2026 while maintaining a strong deposits clientele base of around 12.15 Crores.

The Bank is always keen on maintaining a well-balanced asset mix, encompassing sectors such as Agriculture and Micro, Small and Medium Enterprises (MSMEs) as well as keeping a focus on retail assets, including Housing, Education, and Vehicle loans. This year our Bank''s retail portfolio grew by 32.93% y-o-y to ''2,96,912 Crores with Housing loans growing by 17.55% y-o-y to ''1,24,799 Crores, vehicle loans growing by 26.33% y-o-y to ''26,070 Crores and education loan growing by 11.67% y-o-y to ''21,060 Crores. Advances to MSME segment stood at ''1,57,831 Crores, a y-o-y growth of 12.85% as at March 2026. The number of borrowal clientele stood at ''1.23 Crores as at March 2026.

FINANCIAL PERFORMANCE

For FY 2025-26, the total Income of the Bank increased by 7.73% y-o-y to ''1,53,204 Crores and the net interest income, the difference between interest paid and interest earned by the Bank, grew by 0.37% y-o-y to ''37,210 Crores. The Gross NPA ratio declined by 110 bps y-o-y to 1.84% this year and Net NPA declined by 27 bps y-o-y to 0.43%. Provision Coverage Ratio (PCR) improved by 151bps y-o-y to 94.21% as at March 2026.

PROFITABILITY

The Bank has growth of 12.69% y-o-y in net profit to ''19,187 Crores in FY 2025-26 with operating profit growing by 5.19% y-o-y to ''33,019 Crores. Net Interest Margin (NIM) of the Bank decline by 22 bps at 2.51% in March 2026 from 2.73% in March 2025. Return on Assets (RoA) of the Bank improved at 1.10% in March 2026 from 1.09% in March 2025.

Our Bank has a comfortable capital cushioning with improved Capital Adequacy Ratio, under Basel III at 17.04% as at March 2026 in comparison to 16.33% as at March 2025.

NEW DIGITAL INITIATIVES TAKEN BY THE BANK

a) Braille Credit Cards: Introduced Braille Credit cards for Visually Impaired Persons

b) Safe Deposit Lockers: Nominee updation for Safe Deposit Lockers through Mobile Banking & Internet Banking

c) Credit Card Module in Canara ail: Credit Card Module with new features such as View EMI details, Foreclosure of EMI, Changing Revolving Facility etc., implemented in Canara ai1 Mobile Banking application.

d) Central Bank Digital Currency: Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) Programmability Enhancement in CBDC: The Programmable CBDC framework for PMGKAY has been enhanced to support commodity-level restrictions, moving beyond basic parameters like location and merchant codes. This integration with merchant applications enables real-time validation at the point of purchase, ensuring higher precision and effectiveness in targeted benefit distribution.

e) Interoperable Card-less Cash Withdrawal:

Implementation of Interoperable Card-less Cash Withdrawal (ICCW) functionality as an acquirer in Cash Recyclers.

ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)

PRACTICES

ENVIRONMENTAL:

As part of green initiatives, Bank has undertaken

following initiatives:

S Increased usage of LED lights, BEE rated AC units

S Gradual phasing out of DG sets

? Installed Rain Water Harvesting system in all 122 feasible Bank owned properties and Solar Rooftop Power system across 165 Bank owned properties, with a total capacity of 4133 kWp.

? EV charging station has been commissioned in Head Office Building for charging of staff''s E-Vehicles.

? Bank has been awarded a total of 35 Green building certifications, including 33 office premises and one training centre (Canara Institute of Bank Management Manipal) accredited under the IGBC Green Building certification framework, of which 7 buildings have been accorded silver rating. Further, Bank''s 1 Residential building has been certified under GRIHA (Green Rating for Integrated Habitat).

? Bank is having a significant portfolio under sustainable finance which includes Renewable Energy Projects, Compressed Biogas & Energy Conservation scheme, Solar Pump scheme under PM-KUSUM, Roof Top Solar (RTS) for residential sector with subsidy, Canara Green Wheels scheme for E vehicles.

? Scope 1 & Scope 2 emissions of the Bank accounts for a total of 11272.51 t CO₂ and 165168.84 t CO₂ respectively for the financial year 2025-26.

Social:

Bank is impacting the Society by engaging in helping and uplifting the underserved communities through nonprofit organizations viz.,

S Canara Centenary Rural Development Trust

S Canara Financial Advisory Trust

S Canara Golden Jubilee Education Fund

S Canara Relief and Welfare Society

S Financial Literacy Centres (FLC)

S Rural Self Employment Training Institutes (RSETIs)

S Rural Development & Self Employment Training Institutes (RUDSETIs)

? During March 2026 quarter, Bank has conducted 2,370 awareness programs and 662 training programs through its RSETIs and RUDSETIs, benefiting 18,000 plus candidates to upgrade their skill sets.

? Bank has 118 Financial Literacy Centres (FLCs) through which 6,295 camps have been conducted and 6,09,611 persons were extended Financial Literacy during March 2026 quarter.

? To promote diversity, equity & inclusive growth, Bank has placed a Women Empowerment Committee named as ''Advaita'' to support the women employee fraternity of the Bank.

GOVERNANCE

For the Bank''s journey towards Sustainability, Bank has in place:

S Board approved ESG Policy.

5 Green Deposit Policy & Lending Framework.

? The Bank publishes its BRSR annually as part of the Annual Report, along with a dedicated Sustainability Report that highlights its initiatives in environmental stewardship, social empowerment, and long-term resilience.

? Bank has a Chief Ethics Officer and an exclusive ''Ethics Section'' is in place to oversee the implementation of business ethics in the organization.

? Bank has been recognized for Excellent Practices and Adoption of ESG Initiatives at the 2nd ICC Emerging Asia Conclave 2024, organized by the Indian Chamber of Commerce.

? Bank''s ESG Risk Rating has been improved from High to Medium by Sustainalytics, reflecting its enhanced sustainability performance.

WAY FORWARD

The outlook for FY 2026-27 remains optimistic, bolstered by sustained domestic growth momentum, liquidity support from the regulator, improving asset quality and healthy capital buffers. In this backdrop, credit growth is anticipated to remain robust in FY27 as well.

Building on the success of our CASA campaign launched in fiscal 2026 the Bank remains focused to significantly enhance the low-cost deposits base in FY 2026-27 by expanding the customer base through innovative and customized products as well as reconnecting with existing customers. Strengthening its digital capabilities to offer secure, fast and seamless customer experience will be a cornerstone of our efforts. Bank also remains focussed on enhancing its bottom line by strategically emphasizing RAM credit portfolio (Retail, Agriculture

6 Allied activities and MSME) while reassessing the corporate portfolio with the aim of enhancing margins. The Bank remains committed to continuous innovation, leveraging its strengths in response to evolving industry dynamics and shifting customer preferences and generate enduring value for all its stakeholders.

The Bank''s management is confident about achieving augmented growth across all business segments by harnessing new age digital technology with strengthened fundamentals in FY 2026-27 and beyond, aligning with the vision to become the Best Bank to Bank With, while contributing to the inclusive growth of the economy.

I extend my gratitude to all members of the Board for their invaluable support, guidance, and insights provided to the management. I also express appreciation to the Department of Financial Services, Ministry of Finance, and the Reserve Bank of India for their support and guidance from time to time. Heartfelt thanks are extended to all our employees for their hard work, dedication, and unwavering commitment. The unequivocal support of all customers and stakeholders in this growth journey has been extremely important for us. We look forward to your continued patronage, support and goodwill as we strive to reach new heights.

Hardeep Singh Ahluwalia

Managing Director & Chief Executive Officer (I/C) & Executive Director