Financial Daily from THE HINDU group of publications
Thursday, Jul 17, 2003
Money & Banking
Public Sector Banks
`Canara Bank equity revamp by year-end'
Bangalore , July 16
CANARA Bank's capital restructuring would be considered only towards the end of this year. This was stated by Mr R.V. Shastri, Chairman and Managing Director of the bank.
Speaking at the first Annual General Meeting after the bank went public here on Wednesday, Mr Shastri, said the bank's lock-in period would be completed only by the end of the year, after it made its maiden public issue last November. He said that the bank however had an adequate capital adequacy ratio of about 12.5 per cent. This was despite returning Rs 278 crore of the capital back to the Government.
The bank's gross business is targeted to grow by 15.5 per cent this year to about Rs 1,31,000 crore, comprising Rs 82,000 crore and Rs 49,000 crore of advances. But the focus, Mr Shastri said, would be on retail advances. Retail advances growth was targeted at 35 per cent of the incremental advances, he said. The bank would also launch its debit card and its mobile banking services during the current year, he added.
Canbank's AGM was attended by nearly retail 6,000 shareholders. These retail shareholders hold about 18 per cent of the bank's equity.
Responding to shareholders' demand for higher dividends against the 35 per cent declared for the financial year 2002-03. This dividend was effective for only five months, Mr Shastri pointed out, and therefore, the annualised returns translated into almost 30 per cent. However, he said, that the bank which had made profits since inception could consider shareholder requests in the next financial year.
Mr Shastri said that the bank was to ensure higher returns to the shareholders in the coming years. Already the earnings per share which was Rs 12.83 improved to Rs 20.56 during the current year.
The book value of the bank's equity had also appreciated to Rs 98.14 compared to Rs 57.84 a year ago.
Besides, the equity which was issued at Rs 25 last year had appreciated substantially in the market.
The bank, he said, had also taken steps for early detection of problem accounts as part of an overall policy of managing non-performing assets.
The gross NPA of the bank was down from 6.22 per cent in 2001-02 to 5.96 per cent in 2002-03.
Recovery of agricultural advances at 85 per cent was the highest among all the public sector bank in the country he added.
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