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Canara Bank board to consider stock split on February 26

1:5 Split, Rs 16.10 Dividend: Canara bank turns ex-date for stock split

Public sector undertakings bank have surpassed the phase when they were watched with scary eyes, banks that were famous for wealth erosion. After the extensive balance sheet cleaning of PSU banks, the NPA has come down significantly, banks are actively competing with private banks in loan syndication and give out profit to shareholders. COVID was the inflection point for banks, as by that time they (banks) were almost done with their big bloat of NPA problems, and the big push by the government in infra came as positive. On comparing the PSU Bank index with the private bank index, PSU Bank took the lead in September 2022.

One of the PSU banks, Canara Bank, which has given an 85% return year-over-year in a circular filed with the exchange saying that board is considering stocks split. The circular dictates "a meeting of the Board of Directors of the Bank is scheduled to be held on Monday, February 26th, 2024, to seek in principle approval from the Board for sub-division or split of the equity shares subject to prior approval of the Reserve Bank of India (RBI) and other Statutory, Regulatory, and Government of India approvals.”.

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In late January, the bank reported its earnings results. The bank reported a net profit of Rs. 3,656 crore for the third quarter of FY24, registering a growth of 26.87 percent from Rs. 2,881.5 crore in the same period last year. The bank's net interest income (NII) during the third quarter rose 9.5 percent to Rs. 9,417 crore from Rs. 8,600 crore on a year-over-year basis. On a q-o-q basis, NIM improved by 9 bps to 3.02 percent but was flat sequentially.

Loan book witnessed 12.6 percent growth on a YoY basis. Gross NPA is also continuously reducing, from 5.89% to 4.39%. And net NPA is also coming down gradually, from 1.96% to 1.32%. Its gross non-performing assets (GNPA) fell 5.1 percent to Rs. 41,722 crore, while its net non-performing assets (NNPA) dropped 3 percent to Rs. 12,176 crore. While slippages increased to Rs. 3,176 crore as against Rs. 2,987 crore, QoQ.

Provision Coverage Ratio (PCR) improved to 89.01 percent as of December 2023 from 86.32 percent as of December 2022. The bank’s provisions in Q3 FY24 dropped to Rs. 1,899 crore from Rs. 2,609 crore in the September quarter and from Rs. 3,124 crore due to a lower writeback of the provision in standard assets.

Canara bank stocks made all time high at Rs 550 in intraday.

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