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Canara Bank and Punjab National Bank (PNB) are not an unequivocal winner for long-term investors on the latest disclosures. For the quarter ended 30 September 2026, Canara reported faster advances growth and a much lower gross non-performing-asset (NPA) ratio. PNB reported higher quarterly net profit, a slightly lower net NPA ratio, stronger capital ratios, and a 1.05% annualised return on assets (ROA). Those operating differences do not by themselves establish which stock offers better long-term returns because current valuation, sustainable return on equity, funding costs and dilution risk still matter.
The figures below are bank-reported results through September 2026. They are an operating comparison, not a price-target or personalised investment recommendation. Current, like-for-like price-to-earnings and price-to-book multiples were not established in the available evidence, so a valuation-based winner cannot be named responsibly.
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At a glance
| Name | Best for | Key spec | Checked |
|---|---|---|---|
| Canara Bank | Investors prioritising faster reported balance-sheet growth and lower gross NPAs | Q2 FY2026-27 profit ₹5,175 crore; advances growth 19.46%; gross NPA 1.33%; CRAR 17.19% | November 2026 |
| Punjab National Bank | Investors prioritising quarterly profitability, capital headroom and lower net NPA | Q2 FY2026-27 profit ₹5,532 crore; credit growth 14.7%; net NPA 0.25%; CRAR 17.95%; CET1 14.44% | November 2026 |
Prices checked November 2026.
“Best for” describes the evidence profile, not a recommendation. Canara’s figures come from its Q2 FY2026-27 results release. PNB’s figures come from its Q2 release and reviewed results.
What do the September 2026 results actually show?
Canara led on reported growth and gross-asset quality, while PNB led on quarterly profit, capital and net-asset quality. The comparison is useful only when the period and ratio definitions are kept consistent.
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| Measure (quarter ended 30 September 2026) | Canara Bank | Punjab National Bank | Investor reading |
|---|---|---|---|
| Q2 net profit | ₹5,175 crore, up 8.40% year over year | ₹5,532 crore, up 12.8% year over year | PNB produced the higher profit and growth rate in this quarter. |
| Global advances or credit growth | Global advances up 19.46% year over year | Credit growth 14.7% in PNB’s Q2/H1 guidance table | Canara’s reported lending growth was faster; growth quality and funding costs determine whether it creates value. |
| Global deposit growth | 13.13% year over year | 9.9% in PNB’s Q2/H1 guidance table | Canara gathered deposits faster, but both banks’ loan growth exceeded deposit growth in these disclosures. |
| Gross NPA ratio | 1.33% | 2.55% | Canara had the lower reported gross NPA ratio. |
| Net NPA ratio | 0.30% | 0.25% | PNB was marginally lower after provisions. |
| Provision coverage | 95.34% | 97.32%, including technical write-offs | PNB’s stated ratio was higher, but definitions must be aligned before treating the gap as decisive. |
| Total capital adequacy (CRAR) | 17.19% | 17.95% standalone | PNB reported more capital headroom. |
| CET1 | 12.80% | 14.44% standalone | PNB had the stronger highest-quality capital ratio. |
| Q2 NIM | Not provided in the cited Q2 press-release extract | 2.58%, up from 2.50% in Q1 FY2026-27 | No same-period NIM winner can be established from these sources. |
| Q2 annualised ROA | Not provided in the cited Q2 press-release extract | 1.05% | PNB disclosed a current-quarter ROA; Canara’s FY2026 ROA should not be substituted for a Q2 comparison. |
Which bank is growing faster, and is that automatically better?
Canara’s disclosed growth was faster, but faster growth is attractive only when deposits, margins and credit quality keep pace. Global advances rose 19.46% year over year at Canara against 13.13% global-deposit growth. PNB’s table showed 14.7% credit growth against 9.9% deposit growth. Both banks therefore expanded loans faster than deposits during the reported period.
A loan–deposit gap can reflect deliberate balance-sheet optimisation, but it can also increase the need for higher-cost term deposits, certificates of deposit or other wholesale funding. That can compress net interest margins (NIMs) and make a high-growth year less profitable through a full rate cycle. An investor should track the gap for several quarters, not infer a permanent advantage from one period.
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Canara’s growth profile is the stronger case if the bank can maintain its deposit franchise without paying materially more for funds. PNB’s slower credit growth may be more valuable if it preserves margins and underwriting discipline. Compare the banks’ CASA mix, average cost of deposits, loan yields and incremental credit cost in subsequent disclosures.
Which bank has better asset quality?
Canara has the clear gross-NPA advantage, while PNB has a small net-NPA and provision-coverage advantage. Canara reported a gross NPA ratio of 1.33% at 30 September 2026, an improvement of 102 basis points according to its release. PNB reported 2.55% gross NPAs. Gross NPAs show the share of advances classified as non-performing before provisions and recoveries.
After provisions, PNB’s net NPA ratio was 0.25%, compared with Canara’s 0.30%. PNB also reported 97.32% provision coverage including technical write-offs, versus Canara’s 95.34%. The ratios are not perfectly interchangeable: coverage conventions, treatment of technical write-offs and the composition of the loan book affect the result. A lower gross NPA at one bank and a lower net NPA at the other is therefore a signal to investigate, not a standalone verdict.
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For a long-term review, follow fresh slippages, recoveries, write-offs, credit cost and restructured or stressed loans. Check whether improvements come from genuine cash recoveries and upgrades or from write-offs that reduce reported NPAs without restoring the original economics. Also examine sector and borrower concentration, because a benign quarter does not remove cyclical credit risk.
Does PNB’s higher quarterly profit make it the better stock?
PNB’s Q2 profit lead is meaningful but not sufficient to rank the shares. PNB earned ₹5,532 crore in Q2 FY2026-27, up 12.8% year over year, versus Canara’s ₹5,175 crore, up 8.40%. PNB also disclosed a 1.05% annualised Q2 ROA and a 2.58% Q2 NIM, improved from 2.50% in the preceding quarter.
The cited Canara Q2 release does not provide a comparable Q2 NIM or ROA in the supplied extract. Canara’s FY2026 figures, where available, should not be placed beside PNB’s September-quarter metrics as if they were the same period. For an apples-to-apples profitability comparison, wait for both banks to disclose the same-quarter NIM, ROA, ROE, cost-to-income and credit-cost data.
Profit growth can also be distorted by provisions, treasury gains, tax movements or one-off recoveries. A durable lead would show up in pre-provision operating profit, core fee income and ROE over several years, not only in one quarter’s net-profit percentage.
How strong are their capital buffers?
PNB reported the stronger capital position at September 2026. Its standalone CRAR was 17.95% and CET1 was 14.44%, compared with Canara’s CRAR of 17.19% and CET1 of 12.80%. CET1 is the first-loss, highest-quality layer of bank capital, so the difference matters when assessing capacity to grow and absorb unexpected losses.
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Capital ratios still need to be read alongside growth plans and potential fundraising. Rapid loan expansion consumes capital; a bank that raises equity can preserve growth but dilute existing shareholders. Check each bank’s stated capital plan, dividend policy and risk-weighted-asset trajectory rather than assuming today’s surplus will remain unchanged.
Government ownership is also material. The Department of Financial Services’ FY2026 PSB table reported Government of India holdings of 62.93% in Canara Bank and 70.08% in PNB. Majority government ownership can shape strategic priorities and capital decisions, but it does not guarantee a share-price gain, a dividend, or protection for minority shareholders.
What does the longer-term record add?
PNB’s FY2026 annual report shows a cleaner balance sheet but weaker margins and returns than FY2025. Audited FY2025-26 net profit was ₹16,904 crore, compared with ₹16,630 crore in FY2025. Global NIM fell to 2.57% from 2.93%; ROA declined to 0.89% from 0.97%; and ROE fell to 15.67% from 19.33%. Gross NPAs improved to 2.95% from 3.95%, while net NPAs declined to 0.29% from 0.40%. CRAR increased to 17.74% from 17.01%.
These figures show why a single good quarter can mislead. PNB improved asset quality and capital while profitability ratios softened. The FY2026 numbers are annual and cannot be directly compared with Canara’s September-quarter metrics.
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Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →For fiscal-year context, the Department of Financial Services reported FY2026 net profit of ₹19,187 crore for Canara and ₹16,904 crore for PNB, with CRAR of 17.04% and 17.74%, respectively. Those government-table figures are useful for scale and capital context, not substitutes for the latest quarter or proof of future returns. The source is the department’s PSB banking analytics table. PNB’s annual figures are in its FY2025-26 annual report.
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How should you compare the two stocks’ valuations?
Use current, same-date valuation multiples against normalised profitability; do not infer value from operating ratios alone. The available evidence does not establish current share prices or comparable price-to-book and price-to-earnings multiples, so it cannot identify which stock is cheaper.
- Refresh price-to-book: use the same market date and the latest reported book value, adjusting for any announced capital issue or exceptional items.
- Normalise earnings: compare through-cycle EPS rather than annualising one quarter that may contain unusual provisions or recoveries.
- Test return quality: ask whether ROE and ROA are supported by core net interest income and fee income, or by lower provisions and treasury gains.
- Price capital needs: a bank requiring fresh equity to fund growth may look inexpensive before dilution and less attractive afterward.
- Use a downside case: model slower credit growth, a rise in slippages, higher deposit costs and a lower NIM. The stock with the more resilient downside may suit a long-term investor even if its headline multiple is higher.
Refresh these calculations after each results release. A low multiple is not automatically cheap if returns remain below the cost of equity; a higher multiple can be justified only by durable, adequately capitalised returns.
What should long-term investors monitor each quarter?
Build a repeatable scorecard rather than relying on one headline number:
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- Margins and funding: NIM, yield on advances, cost of deposits, CASA share and the loan–deposit growth gap.
- Profitability: ROA, ROE, pre-provision operating profit, cost-to-income and core fee income.
- Asset quality: gross and net NPAs, fresh slippages, recoveries, write-offs, restructured loans, credit cost and provision coverage with definitions aligned.
- Capital: CET1, total CRAR, leverage, risk-weighted-asset growth and any planned equity issuance.
- Concentration: exposure to infrastructure, commercial real estate, unsecured retail and other segments that can amplify a downturn.
- Execution: operating-expense growth, branch and digital productivity, regulatory changes and progress against disclosed guidance.
PNB’s FY2027 guidance table targeted NIM of 2.60%–2.70%, gross NPA below 2.50% and ROA above 1%. Its September actuals were 2.58%, 2.55% and 1.05%, respectively. These are PNB’s own guidance and actuals, not independent forecasts; they should be reassessed as new quarters arrive. The table is available in PNB’s guidance-versus-actuals disclosure.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Which bank fits which long-term investor profile?
Canara may fit an investor who values faster reported growth and lower gross NPAs; PNB may fit one who values capital strength, current-quarter ROA and lower net NPAs. Neither profile eliminates valuation or cycle risk.
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| If your priority is… | Evidence leaning | What could invalidate the preference? |
|---|---|---|
| Faster balance-sheet expansion | Canara: advances +19.46% and deposits +13.13% year over year | Growth is funded by expensive deposits, margins narrow or slippages rise. |
| Lower reported gross NPAs | Canara: 1.33% versus PNB’s 2.55% | Recoveries slow, write-offs mask stress or definitions change. |
| Lower net NPAs and higher stated coverage | PNB: 0.25% net NPA and 97.32% coverage including technical write-offs | Coverage basis is not comparable or new slippages increase provisions. |
| Quarterly profit and capital headroom | PNB: ₹5,532 crore profit, 17.95% CRAR and 14.44% CET1 | Margin pressure, weak growth or a future capital raise reduces returns. |
What is the defensible answer for a long-term investor?
There is no evidence-based single winner between Canara Bank and PNB until current valuation and multi-year, like-for-like returns are added. On September 2026 operating data, Canara has the better growth and gross-NPA profile. PNB has the better quarterly profit growth, net-NPA, provision-coverage, CRAR, CET1 and disclosed Q2 ROA profile.
An investor who already owns either stock should compare the latest valuation with normalised ROE, monitor funding and credit costs, and review capital plans before switching. A new investor should wait for comparable profitability data and calculate both stocks’ valuation multiples on the same date. Treat the decision as a balance of price paid, durability of returns and downside resilience—not a contest decided by one quarter’s ranking.
How we picked the comparison criteria
The criteria follow what determines long-term bank-equity outcomes in the supplied disclosures: valuation against normalised earnings and book value; profitability through a rate cycle; advances growth relative to deposits; asset quality and provisioning; CET1 and total capital; ownership and dilution; and execution risks such as margin pressure, concentration and operating costs. The order of the evidence reflects the latest reported figures, not a claim that either stock will outperform.
Frequently Asked Questions
Are Canara Bank and PNB government-owned banks?
Yes. The FY2026 Department of Financial Services table reported Government of India shareholdings of 62.93% in Canara Bank and 70.08% in PNB. Ownership levels can change through future transactions and do not guarantee a return to minority shareholders.
Can I compare PNB’s 2.58% NIM directly with Canara Bank’s results?
Not from the cited releases. PNB disclosed a Q2 FY2026-27 NIM of 2.58%, while the cited Canara Q2 extract does not provide a same-period NIM. Wait for matching quarter definitions before declaring a margin winner.
Why can a bank have a low net NPA but still face losses?
Net NPA is measured after provisions and can remain low even when fresh slippages, restructuring or credit costs rise. Recovery timing, write-offs and coverage definitions can change the ratio, so investors should examine gross slippages and credit cost alongside net NPAs.
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Record the share price on one date, latest book value per share, normalised EPS, ROE, CET1 and expected capital issuance for both banks. Then compare price-to-book and price-to-earnings with a downside case for slower growth, higher deposit costs and weaker asset quality.
