Canara bank to bring down govt stakes

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Mumbai, Jan 9 (UNI) Public Sector Canara bank Chairman M B N Rao today said that the bank will go for dilution of its stakes in two to three stages to bring it down to 51 per cent where government has 73 per cent stakes.

While speaking to the reporters at the sidelines of Banking Technology conference, Mr Rao said, ''We have recieved the necessary approval from the regulator for dilution of stakes and we are considering to bring the government stake down to 51 per cent.'' It may be mentioned out here that the government permits Public Sector banks to bring down its holding to 51 per cent.

However, he did not give specific time frame for the completion of the process but hinted that it will be completed in two to three stages.

Mr Rao also said that during the current year, it may acquire a bank which can increase its footprint in the North and West India.

While answering to the question, whether the bank has zeroed in on any target, Mr Rao said that it is too premature to talk about the names. ''I would not say public sector or private sector but there is a possibility,'' he said.

On the issue of funding of any possible acquisition, Mr Rao said Canara Bank has been one of the strong banks with good fundamentals.

There is no problem as far as capital for acquisition is concerned.

The bank has a capital adequacy ratio of 13.9 per cent.

For the quarter end Septemeber 30, Canara bank had reported a net profit growth of 11 per cent at Rs 402 crore.

Aggregate business of the bank reached a level of Rs 2,40,537 crore at the end of second quarter, reflecting an 18 per cent year-on-year growth.

''The bank is fully geared to make a smooth transition to new capital adequacy framerwork effective April 2008,'' he added.

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