Canara Bank gains on plan to divest stake in Canbank Factors

Canara Bank shares gained around one percent in early trade on November 29. The public lender has received permission from RBI to divest its 70 percent stake in its unlisted subsidiary Canbank Factors.

At 9.20 am, shares of Canara Bank were quoting Rs 398.6 on the NSE, higher by 0.63 percent compared to the previous session’s closing price.

Additionally, Canara Bank is proposing to buy out the other shareholders in its unlisted subsidiary, Canbank Computer Services (CCSL). Bank of Baroda and DBS Bank India are the other shareholders, while Canara Bank holds 69.14 percent of the shares in the firm. Canara Bank is also exploring transferring the credit card and other digital product portfolio of the bank to CCSL.

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Canbank Factors is Canara Bank’s factoring arm, which helps MSMEs secure funding and boosts cash flow.

Earlier this month, the state-owned Canara Bank planned to float bonds worth Rs 5,000 crore. According to market participants, these are infrastructure bonds and will mature in 10 years or on November 29, 2033.

The lender reported a net profit of Rs 3,606 crore for the July-September quarter of FY24, up 43 percent from the year-ago period. Its net interest income (NII) came in at Rs 8,903 crore, 19 percent higher than the year-ago period.

The stock has gained 17.63 percent this year against the benchmark Nifty’s returns of 9.3 percent.

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