Canara Bank Vs Bank Of Baroda: Banks play a major role in the economy. They serve as the bridge for trade and money circulation in the economy. Previously, private sector banks were rated higher due to technological advancements and the ability to launch new products to customers more quickly. Nowadays, public-sector banks compete with private-sector banks.

In this article, we will compare both PSUs Canara Bank vs Bank of Baroda with their financials and future plans.

Canara Bank Vs Bank Of Baroda – Company Overview

Canara Bank

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Canara Bank was founded in July 1906 by Ammembal Subba Rao Pai in Mangalore. It was nationalised in 1969 and became a major player. The bank diversified its business in the 1980s. In June 2006, this bank has completed a century of operations in the Indian banking industry.

It has 9,585 branches and 12,120 ATMs/Recyclers across India, serving over 11.30 crore customers as of December 2023. Canara Bank and Syndicate Bank merged on April 1, 2020, to diversify risk and improve outreach to customers. They offer personal banking services like savings and current accounts, debit/credit cards, investment plans, and loan products such as housing and vehicle loans.

Additionally, they provide inter-bank fund transfers, mutual funds, insurance, foreign exchange, international banking, depository services, and corporate banking services, including deposits, term loans, and syndication services.

Segment Analysis

In FY23, the company earned its revenue from various sources. Treasury accounted for 19.75%, retail banking operations accounted for 43.21%, wholesale banking operations accounted for 29.44%, and life insurance accounted for 7.58%. The majority of the revenue, which was 96.52%, came from domestic operations, while the remaining 3.47% came from international operations.

Bank of Baroda

Bank of Baroda, Maharaja Sayajirao Gaekwad III, founded the bank on 20 July 1908. The bank, together with 13 other major commercial banks in India, was nationalised by the Government of India on July 19, 1969, and has been designated as a profit-making public sector undertaking (PSU).

This bank was merged with Dena Bank and Vijaya Bank on April 1, 2019, to expand its customer base, consolidate public-sector banking, and compete globally. The company offers commercial, personal, and corporate banking solutions, along with appraisal, merchant, and correspondent banking, cash management, and treasury services to meet diverse financial needs.

Segment Analysis

The company earned its total revenue in FY23 from Treasury accounting for 25.79%, corporate or wholesale banking accounting for 31.13%, retail Banking accounting for 36.18%, and Other banking operations accounting for 6.91%.

Canara Bank Vs Bank Of Baroda – Industry Analysis

India, the world’s largest consumer market, will overtake the United States as the third largest consumer economy by 2030, thanks to a young population of 65% of the population under the age of 35.

By 2050, India is expected to have the third-largest domestic banking sector. The Indian banking industry has been on a roll, thanks to strong economic growth, rising disposable incomes, increased consumerism, and easier credit access. 

Digital payment methods have grown by leaps and bounds in recent years. As a result, traditional paper-based instruments like cheques and demand drafts now account for a small percentage of payment volume and value. Recent collaborations with Fintech are also contributing to significant advancements.

In the 2021 budget, the FM introduced bad banks or asset reconstruction companies to buy stressed bank assets and clean up the balance sheets. 

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Canara Bank vs Bank of Baroda – Financials

Net Interest Income and Net Profit

In FY23, Canara Bank’s Net Interest income increased 19.27% year on year to Rs. 32,894 crores, compared to 27.84% increase year on year for Bank of Baroda, which was Rs. 44,196 crores. Canara Bank and Bank of Baroda reported an 84.21% and 89.14% YoY increase in net profits for FY23, amounting to Rs. 11,344.58 crore and Rs. 15,005.21 crore, respectively.

Canara Bank and Bank of Baroda have both improved since COVID-19. Canara Bank’s revenue CAGR was 22.60% and its net profit CAGR was 100.93%. Bank of Baroda’s revenue CAGR was 21.32% and its net profit CAGR was 89.40%.

Canara Bank and Bank of Baroda faced challenges in the fiscal year 2020, with Canara Bank reporting a net loss and Bank of Baroda’s profits falling by 18.91% YoY. Increased provisions impacted both banks’ bottom lines. However, in the aftermath of the COVID-19 pandemic, both banks have made a remarkable recovery, with their profits leaping exponentially up until the recent fiscal year 2023.

Particulars/ Financial Year2022-232021-222020-212019-202018-19CAGR (4 Years)
Canara Bank - Net Interest Income₹ 32,894₹ 27,578₹ 25,070₹ 13,941₹ 14,55822.60%
Bank of Baroda - Net Interest Income₹ 44,196₹ 34,569₹ 31,112₹ 28,854₹ 20,40021.32%
Canara Bank - Net Profit₹ 11,344.58₹ 6,158.42₹ 2,956.56-₹ 1,921.00₹ 696.05100.93%
Bank of Baroda - Net Profit₹ 15,005.21₹ 7,932.98₹ 1,620.29₹ 980.71₹ 1,166.2689.40%

Net Interest Margin and Net Profit Margin

Canara Bank and Bank of Baroda’s NIM in FY23 were 2.38% and 2.89%, respectively, representing 8.67% and 12.45% year-on-year increases.

Canara Bank and Bank of Baroda’s NPM in FY23 were 12.58% and 15.60%, respectively, representing a 53.41% increase for Canara Bank and a 48.71% increase for Bank of Baroda.

Both banks performed well in terms of NIM and NPM. However, the Bank of Baroda has a better NIM and NPM than Canara. There is an increasing trend in both ratios. If interest rates in the economy are high, it may put pressure on margins as borrowing costs rise.

Particulars/ Financial Year2022-232021-222020-212019-202018-19
Canara Bank - NIM2.38%2.19%2.12%1.88%2.19%
Bank of Baroda - NIM2.89%2.57%2.58%2.40%2.48%
Canara Bank - NPM12.58%8.20%3.84%-4.06%1.14%
Bank of Baroda - NPM15.60%10.49%1.95%1.19%2.05%

Return Ratios

In FY23, Canara Bank and Bank of Baroda had a return on equity (RoE) of 15.94% and 14.18%, respectively. Their return on assets (RoA) was 0.81% and 0.97%, respectively.

Both banks have performed well on these parameters, and both their ratios are increasing YoY. Canara’s RoE has grown significantly by 60.04%, while Bank of Baroda’s RoE has grown by 66.04% YoY. Canara has a higher RoE than Bank of Baroda.

Both banks are experiencing improvements in their RoA as a result of good profits. Bank of Baroda has a higher RoA than Canara. Although banks typically have low RoA due to various factors such as their business model, regulatory requirements, risk management practices, and economic conditions, it represents the profit earned from total assets for the year.

Particulars/ Financial Year2022-232021-222020-212019-202018-19
Canara Bank - RoE15.94%9.96%5.34%-5.69%1.92%
Bank of Baroda - RoE14.18%8.54%1.87%1.21%2.20%
Canara Bank - RoA0.81%0.48%0.24%-0.26%0.08%
Bank of Baroda - RoA0.97%0.58%0.12%0.07%0.13%

Gross and Net Non-Performing Assets

Canara Bank and Bank of Baroda’s gross NPAs in FY23 were 5.00% and 4.00%, respectively, compared to 8.00% and 7.00% in FY22. Canara Bank and Bank of Baroda’s Net NPAs in FY23 were 1.73% and 0.89%, respectively, compared to 2.65% and 1.72% in FY22.

Both Canara Bank and Bank of Baroda have significantly improved their Gross NPA and Net NPA ratios over the years. Bank of Baroda fares well compared to Canara in both metrics. These ratios indicate loans that have gone bad. Effective risk management is crucial for banks before lending loans, and loan underwriters play a major role in this process.

Loans are classified based on unpaid days by the borrower.

Particulars/ Financial Year2022-232021-222020-212019-202018-19
Canara Bank - Gross NPA5.00%8.00%9.00%8.00%9.00%
Bank of Baroda - Gross NPA4.00%7.00%9.00%9.00%10.00%
Canara Bank - Net NPA1.73%2.65%3.82%4.23%5.37%
Bank of Baroda - Net NPA0.89%1.72%3.09%3.13%3.33%

Canara Bank Vs Bank of Baroda – Key Metrics

Here are some key metrics for both banks.

ParticularsCanara BankBank of Baroda
CMP₹ 545.55₹ 248.85
Market Cap (Cr.)₹ 98,969₹ 1,27,784
Capital Adequacy Ratio (%)16.68%16.24%
CASA Ratio (%)31.07%39.23%
Net Profit Margin (%)12.58%15.60%
Cost to Income Ratio (%)42.63%41.65%
FII Holding (%)11.21%12.27%
Enterprise Value (Cr.)₹ 12,33,726.37₹ 13,73,294.98
Price to Book Value1.411.22

Canara Bank vs Bank of Baroda – Future Plans

Canara Bank

  • The bank is planning to issue tier-I bonds worth Rs. 2,000 crore to strengthen its equity base 
  • It is planning to enhance its customer-centric approach by offering various digital initiatives.
  • In FY2025, the company plans for the divestment of 2 subsidiaries with 1 subsidiary already having board approval.
  • Increase in business growth through data analytics and lead generation from current 8-12% to 20-25%.

Bank of Baroda

  • The bank aims to raise Rs. 15,000 crores for strategic expansion, with plans to obtain Rs. 2,000 crores from Tier-II bonds, Rs. 3,000 crores and Rs. 8,000 crores from the greenshoe option and Rs. 2,000 crores from infrastructure bonds.
  • Personal Loan Growth is expected to target growth at 30-35% annual levels in the upcoming year.
  • Guidance of 14-16% credit growth, over 1% RoA, 3.15% NIM, 5bps increase or decrease based on economic conditions.
  • Plans to introduce floating rate deposits linked to MIBOR for HNIs, or institutional investors, as well as green bonds.


As we near the end of the article on Canara Bank Vs Bank Of Baroda, we will take a quick look at the comparison. Both banks benefit from the expanding credit cycle with increasing demand and loan disbursements despite high interest rates. When it comes to the banking sector, Canara Bank has emerged as one of the major players with strong financials.

However, in comparison to Bank of Baroda, Canara Bank’s performance falls slightly behind. Canara Bank has performed well, but profitability alone is not the only measure of a bank’s evaluation.

What do you think about the growth of these companies? Let us know about your views in the comments section below.

Written by Santhosh

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