Canara Bank

Dear Shareholders,

I am honoured to present the Annual Report of our Bank for the Financial Year 2024-25 - yet another remarkable year, that stands as a testament to our commitment to excellence, innovation and unwavering dedication to create value for each of our stakeholders.

I express my heartfelt gratitude to each one of you for the invaluable partnership with Canara Bank, which has been instrumental in guiding the Bank through the current landscape. Your steadfast support over the years has facilitated our Bank's evolution as a Financial Conglomerate, ensuring our continued prominence within the industry as reflected in the key financial metrics. With your full support, we are confident of navigating the ensuing financialyear as well, even amidst a volatile and dynamic turn of events on the domestic front and across the globe.

Global economy a mixed bag: On the global macroeconomic front, the latter half of 2024-25 has been unprecedented. As per the latest IMF World Economic Outlook - April 2025, the global growth forecast for 2025 has been revised downwards from 3.1% to 2.8%, marking a 30 basis points decrease from its January 2025 update. However, reciprocal tariffs intiated by the US and the related standoff with China seems to be ebbing if the truce agreed between them, is any indication. If trade war fears recede and stability returns global GDP growth might exceed IMF forecast.

Domestic economy displays resilience: Amidst this global backdrop, the outlook for domestic economic activity remains relatively robust, driven by sustained push in public capex, momentum building up in the manufacturing and services sectors, improving business sentiment and healthy Corporate & Bank balance sheets. In its April 2025 update to the World Economic Outlook, the International Monetary Fund (IMF) has maintained India's growth projection for FY 2025-26 at 6.3%. The World Bank has pegged its growth forecast for the Indian economy for FY 2025-26 at 6.3%, down from its previous estimate of 6.7%, but still helping us to retain the fastest growing economy tag. The Free Trade Agreement (FTA) with the UK and the impending bilateral trade agreement with US will provide further impetus to exports and economic growth. As per Reserve Bank of India (RBI) forecast, India's economic growth at 6.5% for FY 2025-26 and headline inflation at 4% assuming a normal monsoon.

Banking sector landscape: Favourable domestic macroeconomic conditions supported credit growth of banks in FY25. However, banking system liquidity remained tight for most part of the year amidst focus on withdrawal of accommodation by RBI to ensure that inflation progressively aligns with the target. Tight liquidity, as an outcome of deposit growth lagging credit growth, led to competition for resources leading to pressure on margins. However since February 2025, RBI started the easing cycle with a repo rate cut of 25 bps followed by another 25 bps on April 9, 2025. Another significant to maintain a liquidity surplus of 1% of NDTL in the banking system. Other factors like low inflation and the introduction of bond forwards helped Central and State Government bond yields to stay benign. Our Bank achieved spectacular results for the year ended March 2025. Despite challenges, Return on Assets increased by 8 bps to 1.09% for the full year ended March 2025, while global business was Rs.25.30 lakh Crore accompanied by a 16.99% year-on-year growth in Net Profit to Rs.17,026.7 Crore. Asset quality improved substantially with a 129bps y-o-y decline in Gross NPA ratio to 2.94% in March 2025. Aligned with the Government's focus on financial inclusion, the Bank diligently achieved the mandated targets under priority sector lending.

Robust economic growth and healthy balance sheets of banks bode well for credit growth in FY26. Nevertheless, the banking landscape is changing with the evolution of Artificial Intelligence (AI), Data Analytics, Internet of Things (IoT), Advanced Technology used in Digital Rupee Application and enhanced Cyber Security frameworks.

Key digital initiatives:

Bank is at the forefront in Artificial Intelligence and has implemented both Gen AI and Agentic AI use cases, by going a level further. The Bank has Gen AI use cases to ensure operational efficiency, better customer experience, data driven decision making, better compliance and audit functions. Agentic AI use cases include inspection, data quality management and augmented virtual reality assistance for customers. A couple of projects involving employee and customer experience are live while others involving operational efficiency are in exploration / proof of concept stages.

• Bank is leveraging other advanced new-age technologies such as IoT, Near Field Communication (NFC) and Geospatial technology for providing services such as e-Surveillance of ATMs to prevent ATM related frauds, Tap & Pay services, potential business identification etc

• Bank has made use of permitted advanced technology for providing Digital Rupee Application to its customers. Bank has onboarded M/s. Deloitte to enable it to build the Digital Personal Data protection policy and Consent Management Framework to comply with the Digital Personal Data Protection Act (DPDPA). The bank has drafted key policies in this regard and has appointed a Data Protection Officer.

The bank will also focus on full tool integration, employee training and audit readiness. The bank is embedding privacy into its operations ensuring that stakeholder data is handled responsibly and securely.

The Bank has integrated with the Unified Lending

Interface (ULI) developed by RBI Innovation Hub, to enhance digital lending journeys. This collaboration began in 2022 with Kisan Credit Card (KCC) loans below INR 1.6 lakh, utilizing end-to-end integration with direct land search APIs. ULI also offers a range of APIs for MSME loans, including access to GST details, account aggregator data, and Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) eligibility. Its adoption has led to faster loan approvals with minimal customer disruption.

The Bank has a board-approved fintech policy. The Bank has partnered with API-based fintech companies such as Perfios, ScoreMe and others that enable seamless data verification and digital lending processes, making credit more accessible to customers. The Bank has also tied up with National E-governance Services Ltd. (NeSL) to digitize document execution by simplifying and accelerating legal formalities. Bank is also leveraging solutions from Sesame Software to strengthen SMA (Special Mention Account) monitoring and collections, thereby strengthening risk management frameworks.

• Various cyber security related initiatives have been undertakenonacontinuousbasistocreateawareness about recent trends in this domain. Cyber Jagrukta Diwas is being celebrated on first Wednesday of every month. Every year, October is being celebrated as National Cyber Security Awareness Month (NCSAM), the target audience being all stakeholders including employees, customers, vendor partners etc.

Awards and recognitions:

Bank is a recipient of several awards and accolades. These include:

• The Golden Globe Tiger Award for "Excellence in Training" initiated by World HRD Congress.

• Conferred with the "PSU Data Quality Champion – FY 25'' and won the Award for overall Best Data Quality amongst all Public Sector Banks by TransUnion CIBIL.

• WarriorAward for Execution of Digital & Paperless documentation in Gold Loans organized by the NeSL.

• Prestigious Rajbhasha Kirti Puraskar in region ‘C' for the bank's quarterly in-house magazine 'Canara Jyoti'.

• Canara Bank In-House Magazine "Shreyas" and Hindi Magazine "Canara Jyoti" won awards under the Best In-House Magazine category in the 32nd Edition of Global Brand Excellence Awards conducted by World Brand Congress.

• Silver Award and an award for API Banking under Banking, Financial Services and Insurance (BFSI) Category at Skoch Award ceremony on 30th November 2024.

• IBS Intelligence (IBSi) Global Fintech Innovation Awards - Mule Detection using ML.

• Indian Green Building Council (IGBC) felicitated Canara Bank with IGBC Green Champion Award

2024 in the category of financial sector enterprises with large-scale adoption of green bank branches during the 22nd World Green Building Council (GBC) conference on 14-16 November 2024 at Bengaluru.

• Excellent practices under adoption of Environmental, Social and Governance (ESG) Initiatives award at the 2nd Indian Chamber of Commerce (ICC) Emerging Asia Banking Conclave 2024 and Finnoviti Award for 'CANARA Digital Rupee' application on 19th June 2024.

• First Prize under category of Best Lenders (both Public & Private sector) for outstanding achievement under PM SVANidhi 2023-24.

Financial inclusion and social responsibility: Under Pradhan Mantri Jan Dhan Yojna (PMJDY) Bank has opened 2.16 Crore accounts. The Bank has also enrolled in schemes like Pradhan Mantri Jeevan Jyothi Bima Yojna (71.89 Lakh), Pradhan Mantri Suraksha Bima Yojna (231.96 lakh) and Atal Pension Yojna (49.68 lakh). Bank is active in community initiatives through various activities like training unemployed rural youth, scholarship to meritorious SC / ST Girl students, renovation of schools, provision of infrastructure facilities to needy educational institutes, provision of primary health care, community development, Swachh Bharat Mission etc.

Sustainability and ESG initiatives: The Bank is actively focussed on sustainability goals. Bank has partnered with an industry expert to publish its Sustainability reports, establish a Climate Risk Management Framework, identify the risks associated with climate change and take steps to scrutinise ESG risks. Bank has actively participated in the RBI's Green Bond Issuance programme.

Priority sector initiatives: Bank is at the forefront in priority sector initiatives and major initiatives during FY25 were as below:

• Rolling out SHG loans through digital lending platforms pan-India.

• Launched Krisi Vasant Core Agri Fresh Disbursement campaign, achieving 115% of the target.

• Actively participated and achieved allotted targets under ‘Pragati' and ‘Arise' campaign launched by Ministry of Agri and Farm Welfare.

• Al credit linked govt sponsored schemes received through Jan Samarth portal have been converted into business.

• Under Govt sponsored schemes PM Kusum, Compressed Biogas and ethanol blended petrol, bank achieved yearly growth of 44%, 66% and 30% respectively.

• Bank is also undertaking initiatives to empower women, weaker sections and farmers through various other priority sector initiatives which also form part of the financial inclusion agenda.

Geographic expansion: As on 31.03.2025, Bank had 3139 branches in rural category. Each year a good number of banking outlets are opened in Unbanked Rural Centres (URC). In FY25, the bank opened 270 branches (250 General & 20 Specialised) out of which 38 were in unbanked rural areas.

Way forward: The Bank is well-positioned to capitalize evolving business opportunities in a dynamic landscape. Bank has been conducting "Strategy meetings" for effective strategy formulation and fostering alignment with its vision among all stakeholders. The bank is steadfast in its commitment to its founding principles of serving the society at large.

I extend my heartfelt gratitude to all stakeholders - including shareholders and customers - for their unwavering support and patronage. Further, I extend genuine gratitude to all Canarites, whose contribution has been pivotal to the Bank's excellence and continued growth.

I acknowledge with gratitude the support and guidance received from the Government of India and the RBI. I thank the Securities & Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), National Bank for Agriculture and Rural Development (NABARD), National Payment Corporation of India (NPCI), National Housing Bank (NHB) and other key institutions and regulatory bodies for reposing faith in Canara Bank's professional prowess and capabilities. My gratitude is also due to the Indian Banks' Association (IBA) which has been a key pillar of support and a bridge between banking sector, regulatory bodies and Ministries. I also thank the investor community and media for their constructive coverage. My appreciation is due to the esteemed members of the Board and the Executive team led by the Managing Director & Chief

Executive Officer, the Auditors and the Legal Advisors for their unstinted guidance, support and co-operation. We look forward to your continued support, patronage and inputs in taking our Bank to new heights during FY26 and beyond.