This PSU stock which deals in the business of lending to corporations, retail, and others was in focus after the company received approval from the Reserve Bank of India for the divestment of its subsidiaries through an Initial Public Offer.
Price Action (WA:ACT)
With a market capitalization of Rs. 99,051.51 Crores, the shares of Canara Bank (NS:CNBK) were up by 2.4 percent in the day’s trade touching a day’s high of Rs. 110.75 per share. The stock reiterated from the day’s high and was trading at Rs. 109.20 per share which is up 0.97 percent higher from the previous closing price of Rs. 108.15 apiece.
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What Happened
The stocks of Canara Bank were in focus after the company received approval from the Reserve Bank of India for divesting Canara Bank’s shareholding in Canara Robeco Asset Management Company Limited by 13 percent and Canara HSBC Life Insurance (NS:LIFI) Company Limited by 14.5 percent respectively.
This sale is expected through floating the Initial Public Offer of the above 2 companies. The RBI has intimated following the exemption granted by the Indian Government and the bank to adhere to the October 31, 2029 timeline to bring down its stake in these entities up to 30 percent.
About the Company
Canara Bank was established in 1906 and it is headquartered in Bangalore. It is one of India’s leading public-sector banks. They offer a range of financial services which includes retail banking products like savings accounts, credit cards, and loans as well as corporate banking solutions such as syndication and cash management services.
They operate both domestically and internationally, with a presence in several countries. Their business model focuses on customer-centricity, by leveraging technology for service delivery while catering to diverse segments including MSMEs and NRIs, thereby improving financial inclusion and supporting economic growth.
Products and Services
They provide personal banking services like savings and loans, investment products, corporate banking solutions, and specialized NRI services. They also leverage digital banking through online and mobile platforms for convenience.
Financials & Ratios
Its Net Interest Income grew by 0.75 percent year on year from Rs. 7,706.6 Crores in Q2FY24 to Rs. 7,764.51 Crores in Q2FY25, accompanied by profits of Rs. 3,677.39 Crores to Rs. 4,100.32 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 19.25 percent and a return on assets (ROA) of 1.01 percent. The Loan to Deposit ratio was 0.71 as of FY24.
Shareholding Pattern
As of September 2024, the shareholding pattern with promoters stake holding a share of 62.93 percent in Canara Bank, Foreign Institutional Investors (FII) holdings stood at 11.25 percent, Domestic Institutional investors (DII) standing at 11.65 percent, and public holdings standing at 14.17 percent.
Written by Santhosh S
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