Bank of Baroda vs Canara Bank (2026): NIM, ROE, CASA, NPAs & Which Is Better?
Bank of Baroda and Canara Bank have almost the same deposit base. That makes this less a size comparison and more an experiment in what two management teams do with roughly the same raw material.
Bank of Baroda ended Q1 FY2027 with approximately ₹16.34 lakh crore of global deposits.
Canara Bank had approximately ₹16.12 lakh crore.
The gap is barely 1-2%.
Yet BoB had more loans, higher NIM, a much better CASA ratio and lower current credit cost.
Canara had cleaner NPAs, slightly higher reported ROE and a cheaper equity valuation.
Same deposit base. Different economics.
The ₹16 lakh crore deposit experiment
Produces approximately ₹14.17 lakh crore of global advances, 2.77% global NIM and adjusted ROA around 1.10%.
Produces approximately ₹12.93 lakh crore of global advances, 2.52% NIM and ROA around 1.04%.
The comparison becomes much more useful when followed in that order.
Bank of Baroda vs Canara Bank: Q1 FY2027 scorecard
| Metric | Bank of Baroda | Canara Bank | Current Edge |
|---|---|---|---|
| Reported PAT | ₹1,278 Cr | ₹4,856 Cr | BoB distorted by exceptional item |
| Adjusted earnings context | ₹5,528 Cr excluding NMC settlement | ₹4,856 Cr reported | BoB adjusted |
| NII | ₹12,524 Cr | ₹10,215 Cr | BoB |
| NII growth | +9.5% | +13.39% | Canara |
| Global deposits | ₹16.34 lakh Cr | ₹16.12 lakh Cr | Almost identical |
| Deposit growth | +13.8% | +11.63% | BoB |
| Global advances | ₹14.17 lakh Cr | ₹12.93 lakh Cr | BoB |
| Advance growth | +17.4% | +17.97% | Essentially tied |
| Domestic CASA ratio | 37.72% | 29.70% | BoB |
| Global NIM | 2.77% | 2.52% | BoB |
| Domestic NIM | 2.93% | 2.52% reported bank NIM | BoB |
| ROA | 1.10% adjusted | 1.04% | BoB slightly |
| ROE | 16.57% adjusted | ~18% | Canara |
| GNPA | 1.99% | 1.57% | Canara |
| NNPA | 0.50% | 0.36% | Canara |
| Provision coverage | 93.28% | 94.76% | Canara slightly |
| Slippage ratio | 0.91% | ~0.60% | Canara |
| Credit cost | 0.29% | ~0.49% | BoB |
| Capital adequacy | 16.30% | 17.17% | Canara |
| CET1 | 13.90% | 12.91% | BoB |
| Credit-deposit ratio | 83.31% domestic | 80.25% global | Canara has more deployment headroom |
| Late-August P/E | ~6x | ~5.8-6.4x | Very similar |
| Late-August P/B | ~0.8x | ~1.0x | BoB lower on cited market basis |
Stage one: Bank of Baroda owns the better deposit mix
The most striking difference is CASA.
BoB domestic CASA ratio is 37.72%.
Canara is approximately 29.70%.
That eight-percentage-point gap is large.
Current and savings deposits generally cost less than term deposits.
A bank with a stronger CASA mix begins the lending process with cheaper raw material.
Why does this matter when both banks already have ₹16 lakh crore of deposits?
Because the cost of ₹1 of deposits matters just as much as the number of deposits.
Two banks can each hold ₹100 of deposits.
If Bank A pays materially less interest to depositors, it can:
- Price loans more competitively.
- Protect NIM.
- Avoid stretching for risky high-yield borrowers.
- Generate better ROA from the same assets.
Canara knows CASA is the weak point
The bank has been explicitly trying to improve granular retail liabilities.
Its deposit strategy includes:
- More individual savings balances.
- Retail term deposits.
- Current accounts.
- FCNR deposits.
- Reduced dependence on expensive bulk money.
A move from 29.7% CASA toward the low-30s could materially improve margin even if loan growth does not accelerate.
Canara therefore does not need a riskier loan book to improve ROA
It can improve the liability side instead.
That is strategically attractive.
Higher asset yields often require higher borrower risk.
Lower funding cost can improve margin without changing credit underwriting at all.
Bank of Baroda already enjoys some of that benefit
Its cost of deposits declined sequentially to around 4.66%.
The bank also has a domestic CASA ratio close to 38%.
This helps explain why BoB maintains higher NIM despite operating across large corporate, retail, international and priority-sector portfolios.
Stage two: Bank of Baroda deploys more of the deposit base
BoB has ₹14.17 lakh crore of global advances.
Canara has approximately ₹12.93 lakh crore.
The deposit bases are almost identical.
BoB therefore generates roughly ₹1.2 lakh crore more loans from similar aggregate deposits.
Canara currently has more unused funding room
Its global credit-deposit ratio is around 80.25%.
Bank of Baroda's domestic ratio is around 83.31%.
Different definitions prevent a perfect mechanical comparison.
The direction is still clear.
Canara has some additional room to deploy its deposit base.
Loan growth itself is essentially tied
Canara: +17.97%.
Bank of Baroda: +17.4%.
That is too small a difference to declare a meaningful winner.
The more interesting distinction is where the loans are growing.
Canara's retail book is expanding exceptionally quickly
Retail credit grew roughly 36% year on year.
Housing loans grew close to 18%.
Vehicle lending increased more than 25%.
RAM lending grew above 20%.
This is a major change in the composition of a traditionally large PSU-bank balance sheet.
Why might that help Canara?
Granular retail credit can improve yield and reduce corporate concentration.
It also creates:
- More deposit relationships.
- Cross-sell opportunities.
- Insurance distribution.
- Cards.
- Payments.
- Wealth products.
A retail borrower can be worth more than the interest spread on one loan.
Why might it hurt?
Fast retail growth can create future delinquencies if underwriting loosens.
The loans originated in 2026 will determine:
- 2027-28 slippages.
- Collection expense.
- Credit cost.
- Future ROA.
Today's clean NPA ratios do not guarantee tomorrow's.
Bank of Baroda's growth is more balanced across borrower types
Its corporate, MSME, agriculture and retail books all grew double digits.
This creates diversification.
It may also produce a lower blended asset yield than a concentrated high-yield retail strategy.
The result is still a stronger current NIM than Canara's.
Stage three: Canara has the cleaner current bad-loan stock
GNPA is 1.57% versus BoB at 1.99%.
NNPA is 0.36% versus 0.50%.
Provision coverage is slightly higher.
Slippage ratio is also lower.
This is a meaningful Canara achievement
A year earlier Canara GNPA was approximately 2.69%.
It has fallen by more than one percentage point.
NNPA has fallen from about 0.63% to 0.36%.
The speed of cleanup materially changes how the bank should be valued relative to older PSU-bank cycles.
BoB's asset quality is also historically strong
1.99% GNPA is already low for a diversified PSU bank.
Its early-warning SMA ratios have improved significantly.
Credit cost is only 0.29%.
The bank therefore currently loses less of its earnings spread to provisions than Canara.
Cleaner NPA versus lower credit cost creates an interesting contradiction
Canara has lower reported NPAs.
BoB currently spends less on credit losses.
How can both be true?
Credit cost measures current-period provision expense.
NPA ratios measure the stock of already recognised problem loans.
A bank can have a cleaner existing book but still choose to provision more conservatively during a quarter.
BoB's 0.29% credit cost gives it a meaningful earnings advantage
Canara is closer to 0.5%.
A 20-basis-point difference applied across a ₹13-14 lakh crore loan book represents thousands of crores over time.
This is why small differences in bank credit cost matter far more than they look.
Canara's provision coverage means much of its old stress is already recognised
PCR is approximately 94.76%.
That means the residual shareholder exposure to recognised bad loans is limited.
This helps explain the very low 0.36% NNPA ratio.
Stage four: which deposit base produces more profit?
Bank of Baroda adjusted Q1 PAT: approximately ₹5,528 crore.
Canara reported PAT: approximately ₹4,856 crore.
Both begin with around ₹16 lakh crore of deposits.
BoB currently produces more quarterly profit after removing the exceptional NMC charge.
ROA tells the same story, but only narrowly
BoB adjusted ROA is around 1.10%.
Canara is 1.04%.
A six-basis-point difference is small.
The banks are much closer in asset productivity than the NIM gap alone would suggest.
Canara converts equity into profit slightly better
Q1 ROE is around 18%.
BoB's adjusted ROE is approximately 16.57%.
Canara therefore currently produces more return for each rupee of shareholder equity despite lower NIM and lower ROA.
Why can Canara have higher ROE but lower ROA?
Capital structure.
ROA measures profit versus assets.
ROE measures profit versus shareholder equity.
A bank using less common equity relative to its assets can produce higher ROE even when each rupee of assets earns slightly less.
Total capital is higher at Canara, but common equity is higher at BoB
Canara CRAR: 17.17%.
BoB CRAR: 16.30%.
But CET1:
BoB: 13.90%.
Canara: 12.91%.
This distinction matters because CET1 is the highest-quality loss-absorbing capital.
Bank of Baroda therefore has more common-equity protection
Canara has more total regulatory capital once additional instruments are included.
Both are comfortably above minimum requirements.
Neither currently looks constrained from growing because of capital.
The NMC settlement is the giant exception in BoB's quarter
Reported PAT of ₹1,278 crore makes the bank look dramatically less profitable than Canara.
That interpretation is wrong for forecasting recurring earnings.
The settlement was a real cash and shareholder-value cost.
It is not a recurring quarterly credit expense.
A useful investor treatment is to maintain two BoB profit numbers
Historical shareholder cost: use reported ₹1,278 crore.
Forward operating comparison: use management's approximately ₹5,528 crore ex-settlement figure.
Mixing those purposes produces bad analysis.
Canara's PAT contains a different base effect
Profit increased only about 2.2% despite 13.4% NII growth.
Part of the reason is weaker treasury-related income and higher tax expense.
That means Canara's operating banking engine looks stronger than the headline PAT growth suggests.
This makes both banks examples of why PAT growth should never be read alone
BoB: PAT looks terrible because of an exceptional settlement.
Canara: PAT growth looks weak while NII and credit growth are much stronger.
In both cases, the income statement needs to be decomposed.
Which bank has the stronger funding franchise?
Bank of Baroda.
The evidence:
- CASA 37.72% vs 29.70%.
- Higher current NIM.
- Faster deposit growth.
- More loans generated from a similar deposit base.
Which bank has the cleaner credit franchise?
Canara Bank on current NPA stock.
The evidence:
- Lower GNPA.
- Lower NNPA.
- Slightly higher provision coverage.
- Lower slippage ratio.
BoB answers with a lower current credit cost.
Which bank has more future deposit-deployment capacity?
Canara.
Its 80.25% global credit-deposit ratio is below BoB's disclosed domestic ratio.
Again, definitions differ.
Canara nevertheless appears to have somewhat more room to grow credit before funding becomes an immediate constraint.
Which bank has more margin-recovery optionality?
Canara Bank.
Its CASA ratio is much lower.
That is a weakness today.
It is also the larger improvement opportunity.
If Canara can shift more deposits toward CASA while term-deposit costs decline, NIM can rise without changing the loan book.
BoB already captures more of that funding efficiency
This means incremental improvement may be less dramatic.
The bank's upside comes more from:
- Maintaining high-teens credit growth.
- Preserving NIM.
- Growing fees.
- Keeping credit cost near current lows.
Canara is priced almost exactly at book value
Late-August market sources place P/B around 0.97-1.0x.
P/E is around 5.8-6.4x depending on the date and source.
For a bank reporting around 18% ROE, that is a low multiple.
Why does 18% ROE not automatically deserve 2x book?
Because investors question through-cycle durability.
The market remembers earlier PSU-bank periods when:
- Corporate NPAs surged.
- Credit costs exploded.
- Government capital was required.
- ROE collapsed.
Canara must prove today's return ratios survive beyond a benign credit environment.
Bank of Baroda is also priced below book
Late-August sources place P/B around 0.8x.
The market is therefore applying a valuation discount despite adjusted ROE around 16.6%.
The NMC settlement likely reinforces investor concern about legacy international risk.
The BoB valuation can recover if the NMC event remains isolated
One clean quarter after another matters more than management describing the charge as exceptional.
The market needs evidence that:
- No similar international liabilities emerge.
- Adjusted ROA persists.
- 17% credit growth remains disciplined.
- NPAs remain low.
Canara's valuation can recover through liability improvement
This is a very different rerating mechanism.
If CASA rises and NIM moves from 2.52% toward the upper end of management's range while credit cost remains controlled, ROA can increase materially.
That could justify a higher book multiple even if credit growth slows.
The market values BoB only modestly above Canara in absolute terms
Bull Run's late-August PSU-bank peer data shows roughly ₹1.28 lakh crore market value for BoB and ₹1.15 lakh crore for Canara.
That difference is smaller than the gap in their current NII.
It is larger than the gap in their ROA.
This reflects the trade-off the market is making between:
BoB's stronger funding economics and Canara's cleaner balance sheet plus cheaper valuation.
Canara's retail acceleration is the most important forward credit risk
Retail growth near 36% is much faster than overall credit growth.
That can be a positive mix shift.
It also creates future underwriting risk if product standards loosen.
Investors should track retail slippage separately rather than only bank-wide GNPA.
BoB's faster mortgage and auto growth deserves similar scrutiny
Mortgage loans grew more than 27% and auto loans more than 25%.
These are secured products.
Secured does not mean risk-free.
Collateral valuation, borrower income and collection discipline remain important.
ECL transition can change future provisioning for both banks
Expected-credit-loss accounting moves provisioning earlier in the credit cycle.
Canara has publicly discussed a material transition impact.
The final sector-wide effect depends on RBI implementation, portfolio structure and transition choices.
Investors should therefore avoid assuming current provision ratios map one-for-one into future accounting.
Bank of Baroda risk map
Downside
- Another legacy international issue emerges.
- Credit growth stays ahead of deposit growth for too long.
- Domestic NIM falls materially below 3%.
- Retail/MSME acceleration causes future slippage.
- Credit cost normalises sharply higher.
Confirmation
- ROA returns to 1%+ after NMC.
- NII remains high-single-digit or better.
- CASA stays high-30s.
- GNPA remains below 2%.
- No further exceptional litigation charges.
Canara Bank risk map
Downside
- CASA stays below 30%.
- Retail growth creates future credit losses.
- NIM remains stuck around 2.5%.
- ECL transition reduces capital more than expected.
- Current 18% ROE proves cyclical.
Confirmation
- CASA improves above 30%.
- NIM expands as deposit costs reprice.
- ROA remains above 1%.
- GNPA falls toward 1.5% or below.
- High-teens credit growth remains disciplined.
Bank of Baroda vs Canara Bank: current conclusion
Bank of Baroda currently has the stronger deposit and spread economics.
CASA is substantially higher.
NIM is higher.
Credit cost is lower.
Adjusted ROA is slightly higher.
Canara Bank currently has the stronger reported balance-sheet cleanliness and valuation-to-ROE setup.
GNPA is lower.
NNPA is lower.
ROE is slightly higher.
Total capital is higher.
Bank of Baroda vs Canara Bank FAQs
Which bank has more deposits?
Their deposit bases are nearly identical. Bank of Baroda is around ₹16.34 lakh crore and Canara Bank around ₹16.12 lakh crore.
Which has more loans?
Bank of Baroda, with approximately ₹14.17 lakh crore of global advances versus Canara around ₹12.93 lakh crore.
Which is growing loans faster?
They are effectively tied: Canara around 17.97% and BoB around 17.4%.
Which has higher CASA?
Bank of Baroda by a wide margin, around 37.72% domestically versus Canara around 29.70%.
Which has higher NIM?
Bank of Baroda at 2.77% global and 2.93% domestic versus Canara at 2.52%.
Which has better NPAs?
Canara Bank currently has both lower GNPA and lower NNPA.
Which has lower credit cost?
Bank of Baroda, approximately 0.29% versus Canara around 0.49%.
Which has higher ROA?
Bank of Baroda on an adjusted basis, around 1.10% versus Canara at 1.04%.
Which has higher ROE?
Canara Bank, around 18% versus Bank of Baroda's adjusted roughly 16.6%.
Which stock is cheaper?
Both trade at very low PSU-bank valuations. BoB trades below book, while Canara trades close to book value in late-August 2026 data.
Where can investors compare them on Bull Run?
Use the Bank of Baroda stock page, Canara Bank stock page and Public Sector Bank sector page.
Research sources
Disclaimer
This article is educational and informational only. Bank of Baroda's Q1 FY2027 reported PAT, ROA and ROE were materially affected by the exceptional NMC Group settlement; adjusted figures cited here use management's disclosed numbers and do not remove the real historical shareholder cost of the settlement. Bank of Baroda and Canara Bank disclose some NIM, CASA and credit-deposit metrics on different domestic/global bases, which are labelled accordingly. Current credit costs and NPA ratios are unusually favourable relative to historical PSU-bank cycles and should not be assumed permanent. Canara Bank's future provisioning may also be affected by implementation of expected-credit-loss accounting. Market valuation multiples are point-in-time late-August 2026 observations and vary by data provider. Nothing here recommends buying, selling or holding Bank of Baroda, Canara Bank or any security. Bull Run is not a SEBI-registered Research Analyst or Investment Adviser.