Canara Bank shares gain on board nod to stock split

Share price of state-run Canara Bank gained nearly 1 percent in the early trade on February 17 after the company approved sub-division of its equity shares.

At 9:37am, Canara Bank was quoting Rs 577.30, up Rs 4.50, or 0.79 percent.

"The board of directors of the bank at its meeting held on February 26, 2024, approved sub-division/split of every one equity share of face value of Rs 10 each, fully paid-up, into five equity shares of a face value of Rs 2 each, fully paid-up, subject to approval of the Reserve Bank of India," the company said.

The move is to improve the liquidity of the bank’s share and to make it affordable for retail investors and also to broaden the retail investors base.

The expected time of completion is two-three months from intimation of date of Board Meeting (February 7, 2024) to Stock Exchanges, considering the time taken for receiving RBI’s approval, company added.

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In an another development, the Reserve Bank of India (RBI) imposed monetary penalty of Rs 32.30 lakh on Canara Bank for rule violations.

The bank failed to rectify the rejected data and upload the same with the Credit Information Companies (CICs) within seven days of receipt of such rejection report from the CICs and restructured certain accounts which were not standard assets as on March 31, 2021 under the extant directions.

Earlier in this month, the bank raised Rs 2,000 crore through non-convertible, taxable, perpetual, subordinated, fully paid up, unsecured Basel III compliant Additional Tier 1 bonds of face value Rs 1 crore each at a coupon of 8.40 percent.

Broking house Motilal Oswal in its research report dated January 24, 2024, recommended buy rating on the stock with a target price of Rs 570.

The company had reported 26.87 percent jumped in its net profit of Rs 3656 crore for the October-December quarter of financial year (FY) 2023-24.