Canara Bank shares jump 6% to hit 52-week high on stock split plan

Shares of Canara Bank rallied nearly as much as 6% to hit a fresh 52-week high of ₹550.50 on Wednesday after the state-owned lender informed exchanges about its stock split plan. A stock split is a corporate action where a company increases the number of outstanding shares to make it more affordable for small retail investors and increase liquidity.

The public sector lender said that its board will meet on February 26 to consider the sub-division of the equity shares of the bank, subject to requisite regulatory approval.

“A meeting of the board of directors of the bank is scheduled to be held on Monday, 26th February 2024, to seek in principle approval from the board of directors for sub-division/split of the equity shares of the bank subject to prior approval of Reserve Bank of India (RBI) and other statutory/regulatory/government of India approvals, as may be required,” Canara Bank says in a BSE filing today.

Reacting to the news, shares of Canara Bank rose as much as 5.6% to hit an intraday high of ₹550.50 on the BSE. The banking stock has been rising for the last nine consecutive sessions and increased more than 21% during the same period. The shares have doubled from its 52-week low of ₹268.85 on February 24, 2023. In the last six months, the counter has gained 61%, while it has added over 21% in a month.

In the October-December quarter of the current fiscal, Canara Bank reported a net profit of ₹3,656 crore, up 26.87% from ₹2,881.5 crore in the same period last year. The net interest income (NII) grew 9.5% to ₹9,417 crore as against ₹8,600 crore in the year-ago period, while the net interest margin (NIM) improved by 9 bps to 3.02%.

On the asset quality front, the gross non-performing assets (GNPA) ratio improved to 4.39% in Q3 FY24 as against 4.76% in September 2023, and 5.89% in December 2022. In a similar trend, the net non-performing assets (NNPA) ratio dropped to 1.32% against 1.41% in Q2 FY24 and 1.96% in Q3 FY23.

During the quarter under review, the lender’s provisions fell to ₹1,899 crore from ₹2,609 crore in the September quarter of 2023 and from ₹3,124 crore in December 2022. The provision coverage ratio (PCR) improved to 89.01% as of December 2023 from 86.32% as of December 2022. 

As of December 31, 2023, Canara Bank had 9585 branches, including 3,095 rural, 2,742 semi-urban, 1,906 urban, and 1,842 metro branches, along with 10,463 ATMs across the nation. The PSU lender has three overseas branches in London, New York, and Dubai.

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