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Today's prices ask more of Punjab National Bank than of Canara Bank.
At current prices, buyers of Canara Bank are assuming about 12.5% return on equity against 17.4% in its own record; for Punjab National Bank it is 13.4% against 11.5%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: both on excess return.
- Size: Punjab National Bank is worth about 1.4 times Canara Bank on the stock market.
- Record: Canara Bank has grown revenue faster: Canara Bank compounded at about 16% a year (FY2019–FY2026) and Punjab National Bank at about 14% (FY2019–FY2026).
- What to watch: credit costs at Canara Bank; credit costs at Punjab National Bank.
| Canara Bank | Punjab National Bank | |
|---|---|---|
| Price | ₹131 | ₹143 |
| Market cap | ₹1.19L Cr | ₹1.64L Cr |
| P/E | 5.8 | 7.2 |
| P/B | 1.01 | 1.09 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
01Two businesses
A Bengaluru bank that absorbed Syndicate Bank
Canara Bank, founded in 1906 in Mangaluru, is one of India's largest public-sector banks and is majority-owned by the Government of India. It merged with Syndicate Bank in April 2020, adding branches and customers across the south and beyond.
A century-old bank, rebuilt
Punjab National Bank, founded in Lahore in 1894, is one of India's largest public-sector banks and is majority-owned by the Government of India. In 2020 it absorbed Oriental Bank of Commerce and United Bank of India.
02The records side by side
Canara Bank has grown revenue faster: Canara Bank compounded at about 16% a year (FY2019–FY2026) and Punjab National Bank at about 14% (FY2019–FY2026). By revenue the two are of broadly similar size. Canara Bank kept 11.2% of revenue as net profit in FY2026; Punjab National Bank kept 11.4% of revenue as net profit in FY2026. Canara Bank reported a net loss in FY2020; Punjab National Bank reported a net loss in FY2019.
Full ten-year tables and charts are on each company's page: Canara Bank · Punjab National Bank.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Credit costsLower provisions drove the recovery.
- Return on equityWhether returns stay near recent levels.
- Credit costsLower provisions have driven the profit recovery.
- Return on equityWhether returns hold through the next credit cycle.
05What could go wrong
- Asset qualityA new credit downturn would hit profit.
- Policy lendingGovernment priorities can shape lending.
- Asset qualityA new wave of bad loans would reverse the gains.
- ControlsThe 2018 fraud showed the cost of weak controls.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is Canara Bank or Punjab National Bank better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, Canara Bank trades at 5.8 times earnings and 1.01 times book value, and Punjab National Bank at 7.2 times earnings and 1.09 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between Canara Bank and Punjab National Bank?
Canara Bank, founded in 1906 in Mangaluru, is one of India's largest public-sector banks and is majority-owned by the Government of India. Punjab National Bank, founded in Lahore in 1894, is one of India's largest public-sector banks and is majority-owned by the Government of India.
Are Canara Bank and Punjab National Bank valued the same way?
Yes — both on excess return, so their workings compare like for like.
What does today's price assume for Canara Bank and Punjab National Bank?
Worked backwards from the share price, Canara Bank needs about 12.5% return on equity and Punjab National Bank about 13.4% return on equity, against 17.4% and 11.5% in their own records.