Canara Bank, a Public Sector Unit (PSU) lender, announced on Monday that the board has approved a stock split that will divide each share into five shares to increase the liquidity of the bank’s shares and make them more accessible to regular investors, according to an exchange filing.
Canara Bank has informed us that the anticipated timeframe for finalizing the stock split is estimated to be between 2 to 3 months. This period commences from the date of intimation of the Board Meeting, which was held on February 7, 2024, and extends to the completion of necessary procedures, including obtaining approval from the Reserve Bank of India.
The Reserve Bank of India (RBI) must give its approval before the stock split of its fully paid-up equity shares can occur. On the NSE, the Canara Bank shares finished the day one percent lower at ₹571.90.
The filing states that the Directors, the bank’s designated individuals, their families, and any related parties will be able to trade again on February 29.
Last month, the state-owned Canara Bank reported strong earnings, with net income for the quarter ended in December 2023 rising by almost 27% to ₹3,659 crore.
Increased interest income and lower credit costs drove this expansion. With net interest income rising by 9.50 percent to ₹9,417 crore, the bank with its headquarters in Bengaluru exceeded forecasts. Additionally, there was a notable decrease in the credit cost, which fell by 24 basis points (bps) to an excellent 0.97.
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Throughout the quarter, the bank experienced a significant rise in net interest income, recording a robust increase of 9.5% to attain ₹9,417 crore.
Concerning asset quality, the bank observed a positive development, indicating a reduction in its gross Non-Performing Assets (NPAs) to 4.39% of gross loans by the end of December 2023, compared to the 5.89% recorded a year prior. Likewise, there was a decline in net NPAs, or bad loans, to 1.32% from the 1.96% reported after the third quarter of the preceding fiscal year.
