Canara Bank will seek nod from shareholders to raise up Rs 5,000 cr equity capital in FY21
New Delhi 19 july: Canara Bank will grow up to Rs 5,000 crore equity funding via various ways in the present financial year to increase its capital adequacy ratio in perspective of growth strategies, and will seek out nod from investors to the exact same in its own AGM next month.
In view of specific expansion strategies of the lender, the execution of Basel III standards, and consequent funding cost, there’s a requirement to grow the funds to further fortify the capital adequacy ratio, Canara Bank stated in its annul account for 2019-20.
The bank will seek investors nod in the Annual general meeting (AGM) to be held August 10 through audio/visual ways in light of this coronavirus pandemic.
“To be able to coast the bank’s grade I funds, the Board of Managers of this bank have opted to boost funds to the extent of Rs 5,000 crore through different modes. Such as Follow-on Issue, right issue, preferential issue to government and financial institutions, Qualified Institutional Placement (QIP) and other permitted mode of raising capital,” Canara Bank said in the annual report for FY20.
In its past AGM at July 2019, the bank had sought consent from shareholders for increasing around Rs 6,000 crore as brand new equity capital via various ways such as a QIP.
Also Read | HDFC Bank gets shareholders approval for raising Rs 50,000 crore through bonds
However, the bank said it didn’t increase capital through some of those ways accepted by the investors, although the authorities infused equity funding value Rs 6,571 crore instead of preferential allotment of shares on December 4, 2019.
The bank said its constant attention assisted in enhancing asset quality through the past financial year ended March 2024 as gross profits assets (NPAs) or poor loans dropped to 8.21 percent as on March 31, 2024 by 8.83 percent one year ago. The web NPA decreased to 4.22 percent from 5.37 percent.
Offering a general image of the banking business, Canara Bank stated Scheduled Commercial Banks” (SCBs) deposit growth stood at 7.93 percent year-on-year, whilst credit expansion decelerated to 6.14 percent in 2019-20 according to 10.04 percent and 13.29 percent in the fiscal ended March 2019, respectively.
