Canara Bank Aims for ₹6,000 Crore Recovery in H2 FY25
State-owned Canara Bank is setting a significant target for loan recovery, aiming to recoup approximately ₹6,000 crore from bad loans in the second half of the current fiscal year (H2 FY25). This strategic goal reflects the bank’s ongoing efforts to improve asset quality while building on its recent financial performance.
Canara Bank’s managing director and CEO, K. Satyanarayana Raju, announced that the bank anticipates recovering about ₹3,000 crore in both the third and fourth quarters of FY25. This comes on the heels of a notable recovery of ₹2,905 crore in the second quarter, which includes amounts from written-off accounts. Raju indicated that the expected slippages from loans would be significantly lower than the recoveries, attributed to the bank’s focus on underwriting quality loans.
In addition to its recovery plans, Raju discussed the potential IPO of Canara Robeco Asset Management Company, expected to take place in the fourth quarter of FY25, pending approval from the finance ministry. The bank holds a 51% stake in Canara Robeco and plans to offload a 13% stake through this IPO. This move follows the bank’s previous in-principle approval to initiate the listing process for its mutual fund subsidiary, which would mark the entry of the fifth mutual fund house into the stock market.
Canara Bank’s financial results reflect its robust performance, with an 11% increase in net profit to ₹4,015 crore in the second quarter compared to ₹3,606 crore in the same quarter last year. The total income for the Bengaluru-based lender rose to ₹34,721 crore, up from ₹31,472 crore a year earlier. Additionally, the bank has successfully raised ₹10,000 crore through infrastructure bonds and is currently deploying these funds, though it is unlikely to raise further capital through long-term infrastructure bonds in the current fiscal year.
| Key Points | Details |
|---|---|
| Why in News | Canara Bank aims to recover ₹6,000 crore from bad loans in the second half of FY25. |
| Recovery Target | The bank plans to achieve a recovery of ₹3,000 crore in both Q3 and Q4 of FY25. |
| Q2 Recovery | In Q2 FY25, the bank recovered ₹2,905 crore, including recoveries from written-off accounts. |
| IPO of Canara Robeco AMC | Canara Robeco Asset Management Company’s IPO is expected in Q4 FY25, pending finance ministry approval. |
| Stake in Canara Robeco | Canara Bank holds a 51% stake and plans to offload 13% through the IPO. |
| Financial Performance | The bank reported an 11% increase in net profit to ₹4,015 crore in Q2 FY25, up from ₹3,606 crore in Q2 FY24. |
| Income Growth | Total income rose to ₹34,721 crore in Q2 FY25, compared to ₹31,472 crore in Q2 FY24. |
| Infrastructure Bonds | The bank raised ₹10,000 crore in July through infrastructure bonds, which are currently being deployed. |
| Future Funding | Canara Bank is unlikely to raise additional funds through long-term infrastructure bonds this fiscal. |
In competitive exams like SSC, Defence, State Exams, and Railways, current affairs are crucial. This…
On Saturday, December 21, 2024, several explosive-laden drones, believed to be part of Ukraine's ongoing…
Uttar Pradesh, one of India's most populous states, is known for its rich cultural and…
The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, convened ministers from 28…
India participated in the 24th BIMSTEC Senior Officials Meeting (SOM), hosted virtually by Thailand on…
India is set to host the 2025 Para Athletics World Championships, marking a historic moment…