The Hindu Business Line : Canara Bank plans fresh dilution of Govt holding

The Government, the principal shareholder in the bank's equity, had disinvested 27 per cent few years ago. The plan now is to reduce its stake further by around 22 per cent.

The possibility of initiating the next round of capital restructuring will be discussed at a time when the bank, which has a fairly comfortable capital adequacy ratio of 12.6 per cent, hopes to record more business and greater profitability.

According to Mr R.V. Shastri, Chairman and Managing Director, the total business recorded last year stood at Rs 1,33,900 crore

crore. This is expected to improve this year. He was addressing a banking enclave organised by the Indian Chamber of Commerce on Monday.

``We expect a strong credit growth this year. Non-food credit will account for a critical part of the overall credit portfolio,'' he said, adding that the bank's subsidiaries had notched up a decent growth numbers in recent times.

One of the subsidiaries, Canbank Mutual Fund, has been fairly active lately and has already started utilising some of the parent bank's branches for distributing its schemes. Distribution of insurance products too has taken off well and the bank expects to achieve a good performance in this area. Canara Bank also hopes to widen its network of branches, which now stands at well over 2,000.

It has lined up an overseas expansion programme, to be characterised by a clutch of new representative offices in Hong Kong, Shanghai and Dubai. The RBI's approval for the new offices (which will add to its existing set-up in London) has been sought.

Mr Shastri noted that international operations was already a key part of the bank's overall business and was expected to clock a higher growth this year.

The bank has tied up with State Bank of India to establish a joint venture in Moscow. This will be a 60:40 outfit, with SBI retaining the majority stake. The joint venture, which has been named `Commercial Bank of India', will soon be ready for flag-off.