Tag: Canara Bank

RBI’s draft norms on project financing will not impact credit cost: Canara Bank

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Satyanarayana Raju, Managing Director and CEO of Canara Bank, on Thursday (May 9) said the Reserve Bank of India’s (RBI) proposed regulations on project financing will not significantly affect the net interest margin (NIM) or credit costs of the lender.

“We have passed on RBI’s burden to customers,” Raju told CNBC-TV18.

Despite FY24 being labelled as the toughest financial year for the bank, he remained optimistic about Canara Bank’s ability to navigate challenges effectively.

Expressing the need for clarifications from the RBI, Raju stated, “There are several clarifications we need from RBI,” hinting at ongoing discussions between the regulatory authorities and financial institutions to address concerns and ensure a smooth transition.

Addressing concerns about project finance, Raju conveyed confidence in the bank’s ability to sustain its support for project financing initiatives.

“We don’t see an impact on project finance or projects coming up for financing,” he assured.

Regarding other financial indicators, Raju provided insights into Canara Bank’s corporate book, stating that it stands at ₹3.6 lakh crore, with a significant portion dedicated to state government lending and project finance.

Despite acknowledging the burden imposed by RBI’s regulations, Raju asserted that the bank is resilient and remains committed to its customers.

Further, the bank’s MD discussed lender’s performance metrics, including the bank’s NIM and the gold loan book, which currently stands at ₹1.51 lakh crore.

He noted a shift in the bank’s strategy regarding interest subvention on gold loans, expecting a slowdown in gold loan growth. However, he expressed openness to exploring opportunities in the gold financing sector, especially in light of potential restrictions faced by non-banking financial companies (NBFCs).

Looking ahead, Raju projected optimism regarding Canara Bank’s credit growth, highlighting incremental growth in advances in April 2024. He said, “Don’t expect loan growth below 12% for FY25.”

In the financial results for the March 2024 quarter, Canara Bank reported a net profit of ₹3,757 crore, marking an 18% year-on-year increase.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Canara Bank shares 3% off day’s high on weak loan growth guidance for FY25

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Private sector lender Canara Bank on Wednesday reported its March 2024 quarter net profit at ₹3,757 crore, up 18% year-on-year (YoY). The figure was in line with CNBC-TV18’s estimate of ₹3,753.6 crore. The same was ₹3,174.7 crore in the same quarter last year.

The bank’s net interest income (NII), the difference between interest earned and interest expended, grew 11% YoY to ₹9,580 crore for the reporting quarter. It was ₹8,616.8 crore in the corresponding quarter of last year.

Canara Bank improved its asset quality over a year ago period as gross non-performing assets (GNPA) ratio reduced to 4.23% in the quarter under review, as against 4.39% in a quarter ago period, and 5.35% in a year ago period.

The lender’s net NPA ratio stood at 1.27% as on March 31, 2024, compared to 1.32% in the last quarter and 1.73% in a year-ago period.

The provision coverage ratio (PCR) stood at 89.10% as of March 2024 as against 89.01% as of December 2023, 87.31% as of March 2023.

Canara Bank’s loan growth was weak. Its guidance for loan growth is weaker for FY25 as against FY24 loan growth.

FY25 guidance:
Deposit growth of 10% (11.3% in FY24)
Advances growth of 10% (11.34% in FY24)
CASA ratio at 33% vs 32.29% in FY24
NIM at 2.9% vs 3.05% in FY24
GNPA ratio at 3.5% vs 4.23% in FY24
NNPA ratio at 1.1% vs 1.27% in FY24
Slippage ratio at 1.3% vs 1.28% in FY24
Credit cost at 1.1% vs 0.96% in FY24
ROA at 1% vs 1.01% in FY24
ROE at 18% vs 22.06% in FY24

The bank has also recommended a dividend of ₹16.10 per equity share of face value of ₹10 each to the shareholders for the year 2023-24.

Record Date for payment of dividend will be Monday, June 17, 2024, the bank said.

This will result in a dividend payout of 161%, the lender said in a regulatory filing.

The dividend will be subject to the approval of shareholders at the ensuing Annual General Meeting of the bank.

Shares of Canara Bank Ltd. were 3% off highs after the bank said on mixed FY25 outlook.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stock Split: This PSU Bank sets record date for division of each share into 5

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The board of Canara Bank on Friday, April 19, fixed May 15, 2024, as the record date to determine eligible shareholders for the stock split announced by the company in February 2024.

The bank’s board had earlier approved the split of each share having face value of ₹10 into five shares having face value of ₹2. This is the first time Canara Bank is undergoing a share split since it got listed on the stock exchanges.

Canara Bank has not issued a bonus share either in its history. The last major corporate action it has carried out is a rights issue in February 2017.

Last year, the lender had declared a dividend of ₹12, which was the highest payout by the lender in a decade.

Stock splits are done to infuse liquidity and make shares affordable, particularly for retail investors who could not buy the shares of that company before due to high prices.

This subsequently helps in improving the liquidity in the stock.

For the December quarter, a one-off income aided Canara Bank’s net interest income or core income. The lender’s deposits grew at 8.5% year-on-year for the quarter, while advances were up by 11.7%.

The lender’s cost-to-income ratio was the highest in the last 13 quarters.

The Centre owns nearly 63% stake in Canara Bank, while public shareholders own the rest.

Shares of Canara Bank are trading 0.36% lower at ₹581.35 apiece on the NSE. The stock has risen more than 30% so far this year and has gained nearly 100% over the last 12 months.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rekha Jhunjhunwala cuts stake in PSU Bank and a smallcap stock in March quarter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ace investor Rekha Jhunjhunwala has slashed holding in Canara Bank in the March 2024 quarter and also reduced stake in smallcap Raghav Productivity Enhancers on a quarter-on-quarter (QoQ) basis.

In Canara Bank, Rekha Jhunjhunwala trimmed her holding to 1.45% in the March quarter from 2.07% in the previous December 2023 quarter. The partial profit booking comes on the back of multibagger returns of over 110% in the last 12 months, which is a significant outperformance over Nifty Bank’s 18% returns during the same period.

Today, the stock settled at ₹611.95, up by ₹3.80 or 0.62%. Its market capitalisation stood at around ₹1.11 lakh crore.

Shareholding of individual investors reflects in the ‘Shareholding Pattern’ of BSE-listed companies only on reaching a 1% stake or above in the company.

Meanwhile, the ace investor has also brought down his equity in Raghav Productivity to 5.06% in the January-March quarter of FY24 as against 5.12% in the previous December 2023 quarter.

The stock has corrected 15% so far this year while it has given a return of 45% over a 1-year period.

The stock has many seasoned investors such as Ashish Kacholia, Mukul Agrawal and Rekha Jhunjhunwala as stakeholders.

Raghav Productivity Enhancers is engaged in offering ramming mass minerals. It offers white silica sand, casting powder, white ramming mass, premixed ramming mass and quartz silica ramming mass, among others. The company was set up by the Kabra family, based in Jaipur. The company got listed on BSE in April 2016.

As per corporate shareholdings filed for March 31, 2024, Rekha Jhunjhunwala publicly holds 25 stocks with a net worth of over ₹42,253.4 crore, according to data from Trendlyne.

Other stocks in her portfolio include NCC, Titan Company, Va Tech Wabag, Nazara Technologies, Metro brands, Tata Motors, Tata Communications, Fortis Healthcare, among others.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Prefer Union, Bank of India, Canara over SBI, Bank of Baroda, says BoFA Securities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Brokerage firm Bank of America prefers smaller PSU banks like Union Bank, Canara Bank and Bank of India over larger lenders like State Bank of India and Bank of Baroda, as per its recent note.

Among the two key factors that BoFA Securities highlights, includes the fact that the earnings expectations for both State Bank of India and Bank of Baroda are already quite optimistic, which leaves much lower room for positive surprises.

On the flip side, other state-run lenders are still one to two years behind in their earnings recovery cycle positioning them to drive positive surprises in financial year 2025 and 2026, BoFA wrote in its note.

Additionally, foreign ownership in other state-run lenders is still half of SBI and Bank of Baroda and BoFA Securities sees room for this to narrow going forward.

BoFA Securities believes that the consensus estimates for financial year 2025 are still conservative for Public Sector Banks and hence he sees the scope for a 10% to 20% upgrades in their Earnings per Share.

The brokerage also sees a valuation upside of 10% to 20% as confidence on consistency of Earnings per Share / Return on Assets delivery improves and foreign ownership increases.

It prefers smaller lenders like Union Bank, Canara Bank and Bank of India on better risk-reward on higher earnings growth and valuation upside.

The PSU Bank index has risen 96% over the last 12 months, and stocks like Canara Bank and Union Bank have gained over 100% during the same period, while Bank of India shares are up 80%.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI imposes fines on SBI, Canara Bank, City Union Bank for regulatory breaches

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve Bank of India (RBI) on Monday (February 26) took action against the State Bank of India (SBI), City Union Bank and Canara Bank for regulatory violations.

The country’s largest lender SBI was fined ₹2 crore for failing to comply with provisions of the Banking Regulation Act. An inspection by RBI revealed that SBI held shares as a pledgee, exceeding 30% of the paid-up share capital of certain companies.

Additionally, it failed to credit the eligible amount to the Depositor Education and Awareness Fund within the mandated period. The monetary penalty was imposed based on the RBI’s powers vested in the Banking Regulation Act, of 1949.

Another state-owned Canara Bank faced a ₹32.30-lakh penalty for non-compliance with RBI directions regarding the ‘data format for furnishing of credit information to credit information companies and other regulatory measures’, ‘Resolution Framework 2.0 – Resolution of COVID-19 related stress of micro, small and medium enterprises (MSMEs)’, and ‘Resolution Framework 2.0: Resolution of COVID-19 related stress of individuals and small businesses.’

RBI noted that Canara Bank failed to rectify rejected data and upload it to credit information companies (CICs) within seven days of receiving rejection reports. It also restructured accounts that weren’t standard assets as of March 31, 2021. The monetary penalty was imposed based on the Banking Regulation Act, of 1949, and the Credit Information Companies (Regulation) Act, of 2005.

Further, City Union Bank (CUB) received a ₹66-lakh penalty for non-compliance with RBI’s ‘prudential norms on income recognition, asset classification and provisioning pertaining to advances — divergence in NPA accounts’ and ‘Reserve Bank of India KYC directions, 2016’.

The inspection highlighted the significant divergence between reported non-performing assets (NPAs) and those assessed during the inspection. CUB also lacked a system for periodically reviewing the risk categorisation of customer accounts. The monetary penalty was imposed based on the Banking Regulation Act, of 1949.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stock split news: Canara Bank Board approves division of each share into 5

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Public sector lender Canara Bank on Monday said its board approved the split of each share into five shares.

In an exchange filing, Canara Bank said the move is aimed “to improve the liquidity of the Bank’s share and to make it affordable for retail investors and also to broaden the retail investors base”.

The expected time of completion for the stock split is 2–3 months, the public sector lender added. The Centre owns nearly 63% stake in Canara Bank, while public shareholders own the rest.

Canara Bank reported on January 24 a 27% rise in net profit to ₹3,656 crore for the October-December quarter. The net profit beat a CNBC-TV18 poll estimate of ₹3,451 crore. The net interest income (NII) for Q3 stood at ₹9,417 crore, indicating a 9.5% increase from the same period in the previous financial year, where it was ₹8,600 crore.

The lender’s asset quality showed positive trends, with gross non-performing assets (NPA) at ₹41,722 crore, a decrease from ₹43,955.6 crore in the previous quarter.

The Canara Bank share price settled 1.5% lower at ₹571.90 on Monday. The PSB stock has surged more than 29% this year so far, while the one-year return on the stock is 107%.

Brokerage firm BofA Securities last week retained its ‘buy’ rating on Canara Bank and raised the target price on the stock to ₹660 per share from ₹540 earlier, reflecting a potential upside of about 3% from the current price in the next 12 months.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

BofA Securities upgrades SBI, revises target price of other PSU banks after Q3 results

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Brokerage firm BofA Securities has upgraded State Bank of India (SBI) and Bank of India (BoI), and revised the target prices of Canara Bank, and Punjab National Bank (PNB). BofA made the revisions as the third quarter of the financial year (Q3FY24) earnings beat estimates.

BofA upgraded SBI to ‘neutral’ revising the target price upward to ₹800 per share from ₹690, implying a potential upside of 5% from Thursday’s (February 15) close.

BoI has been upgraded to ‘buy’ with a target price of ₹300 per share versus ₹275 earlier, implying a potential upside of 110% from the current market price.

The brokerage retained a ‘buy’ rating on Canara Bank but raised the target price to ₹660 per share from ₹540 earlier, reflecting a potential upside of about 3% from the current price in the next 12 months.

It also maintained ‘underperform’ on India’s second largest PSU lender PNB with a target price of ₹90 per share, anticipating a potential downside of 30% from the current price, over the next 12 months.

In its report, the brokerage said the earnings per share (EPS) estimate for the sector have been raised by 3-12% on the back of better loan growth and credit cost expectations.

It also noted that the price to book value (P/BV) ratio for all the PSU banks have now converged to 1x and all cyclical improvement have been priced in. The return on asset (RoA) looks sustainable at 1% plus.

There is room for foreign institutional investor positioning to rise as investors see proof of execution over 1-3 years, it observed.

In an interview with CNBC-TV18, Amish Shah, Head of India Research at BoFA Securities said there has been operational improvement within PSU banks and the broader PSU sector, suggesting that the rally in these stocks may continue.

Bank of India shares rose by more than 3% to hit a high of ₹149.70 on BSE after the BofA report. The stock was trading 2.42% higher at ₹146.3 per piece on BSE at 12:46 PM.

SBI shares were trading at ₹770.7 apiece, up 1.19%, on BSE while Canara Bank shares traded flat at 586.5 apiece, down 0.12%. PNB shares rose by 2.64% to trade at ₹132.2 apiece on BSE

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stock Split: This PSU Bank is set to divide its equity shares on February 26

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The board of Canara Bank will meet on February 26 to consider a split of its equity share.

This will be subject to the prior approval from the Reserve Bank of India, and other regulatory approvals.

Canara Bank will be carrying out its first ever stock split in case the proposal is approved.

The lender has not issued a bonus share either in its history. The last major corporate action it has carried out is a rights issue in February 2017.

Canara Bank had last year declared a dividend of ₹12, which was the highest payout by the lender in a decade.

For the December quarter, a one-off income aided the lender’s Net Interest Income or core income. Deposits grew at 8.5% year-on-year for the quarter, while advances were up by 11.7%.

The lender’s cost-to-income ratio was the highest in the last 13 quarters.

Shares of Canara Bank are trading 4% higher at ₹538.4. The stock is trading at a 52-week high and has gained over 82% over the last 12 months.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow