Canara Bank Plans Public Issue In Aug

Canara Bank, which is 100 per cent owned by the Government of India, is contemplating returning Rs 200 crore capital to the government around the time of its initial public offering (IPO). The Bangalore-headquartered bank intends to tap the capital market around August 2002 to raise about Rs 500 crore.

"Post-IPO, the government's stake in the bank will come down to around 60 per cent. The bank's equity capital now stands at Rs 578 crore," R V Shastri, chairman and managing director (CMD), Canara Bank, said at the launch of 'CanLiquid', the open ended cash management scheme of CanBank Mutual Fund, here today.

Canara Bank expects its earnings per share (EPS) to improve to Rs 10 by March-end 2002 from Rs 4.9 as on March 31, 2001, on the back of expectations of the net profit increasing by almost 100 per cent over the last financial year's figure of Rs 285.10 crore. The bank had posted an operating profit of Rs 1,131.22 crore in 2000-01.

Canara Bank's capital to risk weighted assets ratio (CRAR), which stood at 9.84 per cent as on March 31, 2001, improved to 11.5 per cent as on September 30, 2001. Its net non-performing assets to net advances ratio stood at 4.84 per cent as on March 31, 2001.

The bank does not have plans, like a few peer public sector banks (PSBs), to divest stake in any of its eight subsidiaries in favour of a strategic partner. In the case of the computer services subsidiary, Shastri said it is looking to diversify its business by developing financial software products and offer services for other banks.