Canara Bank Targets Rs 6,000 Crore Recovery, IPO for Canara Robeco AMC Expected in FY25 Q4 - Read Now

Canara Bank, which is owned by the government, set its aggressive recovery target in the second half of FY25 as it looks to regain almost Rs 6,000 crore in NPAs. According to Managing Director and CEO K Satyanarayana Raju, the strategy is such that the bank would hope to get around Rs 3,000 crore of that money back in Q3, an equal sum to regain in Q4. This focused effort is part of the strategy of the bank to have a healthy balance sheet while the impact of bad loans are reduced.

During the second quarter, Canara Bank was able to recover Rs 2,905 crore in recoveries that included even accounts written off. Going by this momentum, this strategic shift that the bank has taken by underwriting quality loans have helped in keeping slippages significantly lower than recoveries.

Upcoming Canara Robeco AMC IPO
It appears that one of the principal developments in Canara Bank's growth strategy is likely to be the rollout of an initial public offering (IPO) of its mutual fund arm, Canara Robeco AMC. According to Raju, the IPO is anticipated to take place in the last quarter of FY25; it awaits final approval by the finance ministry. This IPO would mean that Canara Bank, the majority shareholder with a 51% stake in the mutual fund company, would sell a 13% stake. Thus, this would be India's fifth mutual fund house that would become a listed entity on the stock exchanges. It will join the list of HDFC AMC, Nippon Life India AMC, UTI AMC, and Aditya Birla Sun Life AMC.

According to Canara Bank, through its IPO, it expects enhanced corporate visibility for the parent. More importantly, the issuance will enable its shareholders to have a role in the increasingly promising assets' management business. Last December was when Canara Bank formally accepted the proposal for its Canara Robeco AMC going public - a definitive event in Canara's enlargement and coverage of more customers.
 
Fund-Raising and Infrastructure Bonds:
Canara Bank has thus far raised infrastructure bonds amounting to Rs 10,000 crore as on July 2014, and was actively deploying capital to supplement its long term lending base. Raju said he does not propose to go for further fund raise in infra long term bond in current fiscal year; the Bank is well-capitaised with the sum of moneys collected so far.

Strong Q2 performance
The bank's net profit increased 11% in the second quarter at Rs 4,015 crore and Rs 3,606 crore for the same quarter last year. Other than this, the bank's total income was also up at Rs 34,721 crore compared with the previous year's Rs 31,472 crore year-on-year. The trends show that Canara Bank is steadily going on as a resilient and growth firm, backed by the strength of recovery rate and asset management.

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