Business
Canara Bank Announces Stock Split to Increase Liquidity; Retail Investors to Benefit
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Public sector lender Canara Bank has taken a significant step to boost liquidity and enhance accessibility for retail investors. The board of Canara Bank approved a stock split, dividing each share into five shares, in an effort to increase the attractiveness of the bank’s shares among individual investors. The planned stock split is expected to be completed in 2-3 months from the recent board meeting.
Approval from the Reserve Bank of India (RBI) is required for the stock split of Canara Bank’s fully paid-up equity shares. The move is part of the bank’s strategy to improve liquidity and make its shares more affordable for retail investors, aiming to broaden the investor base and increase trading volumes. Canara Bank’s decision follows a successful financial performance in the previous quarter, where the bank reported a robust 27% surge in net income.
During the quarter ending December 2023, Canara Bank witnessed a notable increase in net interest income, which recorded a 9.5% rise to reach ₹9,417 crore. The credit cost demonstrated a significant decline, dropping by 24 basis points to 0.97, reflecting the bank’s improved financial health and management of risk. The asset quality also exhibited positive trends, with reductions in both gross and net non-performing assets.
Canara Bank remains a key player in the public sector banking domain, with the government holding a majority stake of nearly 63%. The bank’s stock price has experienced significant growth, rising over 29% year-to-date. Analysts have shown confidence in Canara Bank’s potential, with a revised target price reflecting a potential upside in the coming months.
The stock split announcement by Canara Bank has implications for the broader financial market, signaling the bank’s commitment to enhancing liquidity and driving participation from retail investors. With positive results and strategic decisions shaping its trajectory, Canara Bank continues to be a notable entity in the banking sector.