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Canara Bank may return govt capital; open to acquisitions
New Delhi, May 25: Canara Bank is likely to embark on yet another capital restructuring, including returning a portion of the Rs 300 crore government capital, by the end of the third quarter, and said it was open to acquisitions.
New Delhi, May 25: Canara Bank is likely to embark on yet another capital restructuring, including returning a portion of the Rs 300 crore government capital, by the end of the third quarter, and said it was open to acquisitions.
"We may think of capital restructuring for returning a part of the government capital only after November," bank chairman R V Shastri said here.
In November 2001, Canara Bank, the fourth largest public sector bank, had returned 48 per cent of government capital aggregating Rs 277.87 crore and now has a capital adequacy of over 12 per cent, higher than RBI stipulated 9.0 per cent.
The move to go in for capital restructuring including the returning of government capital, could be taken up by the bank only after one year of coming out with an IPO as per Securities and Exchange Board of India stipulations. The total capital base of the bank stands at Rs 410 crore including the Rs 300 crore capital of the government after the bank came up with an initial public offer for Rs 110 crore.
Asked to what extent the government equity, which is at present 73.17 per cent, could be brought down with proposed return of capital, he said, "Everything will be decided only after November."
At least three banks including Andhra Bank, Oriental Bank of Commerce and Indian Overseas Bank, are expected to return a portion of government capital in this fiscal. To a query on any plans to acquire other banks, Shastri said, "We will be one of the candidates, if there exist right opportunities."
Asked about the Centre's proposed buyback of government securities, Shastri said the bank could earn a minimum of Rs 350 crore and to that extent there could be provisioning for the bad assets.
Citing that at present the NPA (non-performing assets) coverage ratio stood at 63 per cent, he said it could go up to around 75 per cent. Canara Bank's net NPAs stand at Rs 1,454 crore or 3.59 per cent of the net advances in 2002-03.
On the other plans for this fiscal, Shastri said the bank would soon finalise a partner for distributing the general insurance products and launch debit cards by September.
"Many general insurance companies (both in the public and private sectors) have given their presentations. A decision will be taken within three months," he said. The bank had already entered into an agreement with Aviva for distributing life insurance products and has sold over 250 policies through its 50 branches.
On broadbasing its operations, he said the bank will open 75 more branches by June next year, including 50 branches by March 2004, so as to take the total number of branches to around 2,500.
Highlighting that the bank would be fully computerised by September this year, he said there would be excess manpower and they would be put on recovery, but ruled out any voluntary retirement scheme (VRS).
After the enactment of Securitisation Act, the bank had slapped 900 notices on defaulters for recovering around Rs 350 crore, he said.
"The response was good. We have settled 77 accounts with Rs 50 crore involved," he said, adding five properties had already been sold.
Bureau Report
In November 2001, Canara Bank, the fourth largest public sector bank, had returned 48 per cent of government capital aggregating Rs 277.87 crore and now has a capital adequacy of over 12 per cent, higher than RBI stipulated 9.0 per cent.
The move to go in for capital restructuring including the returning of government capital, could be taken up by the bank only after one year of coming out with an IPO as per Securities and Exchange Board of India stipulations. The total capital base of the bank stands at Rs 410 crore including the Rs 300 crore capital of the government after the bank came up with an initial public offer for Rs 110 crore.
Asked to what extent the government equity, which is at present 73.17 per cent, could be brought down with proposed return of capital, he said, "Everything will be decided only after November."
At least three banks including Andhra Bank, Oriental Bank of Commerce and Indian Overseas Bank, are expected to return a portion of government capital in this fiscal. To a query on any plans to acquire other banks, Shastri said, "We will be one of the candidates, if there exist right opportunities."
Asked about the Centre's proposed buyback of government securities, Shastri said the bank could earn a minimum of Rs 350 crore and to that extent there could be provisioning for the bad assets.
Citing that at present the NPA (non-performing assets) coverage ratio stood at 63 per cent, he said it could go up to around 75 per cent. Canara Bank's net NPAs stand at Rs 1,454 crore or 3.59 per cent of the net advances in 2002-03.
On the other plans for this fiscal, Shastri said the bank would soon finalise a partner for distributing the general insurance products and launch debit cards by September.
"Many general insurance companies (both in the public and private sectors) have given their presentations. A decision will be taken within three months," he said. The bank had already entered into an agreement with Aviva for distributing life insurance products and has sold over 250 policies through its 50 branches.
On broadbasing its operations, he said the bank will open 75 more branches by June next year, including 50 branches by March 2004, so as to take the total number of branches to around 2,500.
Highlighting that the bank would be fully computerised by September this year, he said there would be excess manpower and they would be put on recovery, but ruled out any voluntary retirement scheme (VRS).
After the enactment of Securitisation Act, the bank had slapped 900 notices on defaulters for recovering around Rs 350 crore, he said.
"The response was good. We have settled 77 accounts with Rs 50 crore involved," he said, adding five properties had already been sold.
Bureau Report