RESEARCH REPORT – CANARA BANK

GENERAL OVERVIEW

Canara Bank is one of the oldest state-owned banks with a strong pan-India presence. It also
became the fourth largest public sector bank since its merger with Syndicate Bank. The
banking services that are provided by Canara Bank is consistent with its tagline ‘Together we
can' where it offers an extensive array of products and services to its customers including
housing, personal and vehicle loans with a host of affordable and convenient repayment
options. I personally feel the bank has enormous growth potential post the merger with
Syndicate Bank, making it stronger and showing a promising future in terms of its market
capitalisation and share price. Canara Bank is among the few public sector banks that has
much better control over non-performing assets.

SHAREHOLDING PATTERN

From the shareholding pattern of the company that is summarised below, we can conclude
that SBI is majorly owned by promoters. Following that, the general public and financial
institutions have the next largest stake, accounting for almost 20% of the shareholding,
combined.

Category % Share Holding

Promoters 69.33%
Foreign institutions 4.48%
Banks and Mutual funds 2.39%
General Public 10.25%
Financial institutions 9.57%
Others 3.98%
Source: The Economic Times
MANAGEMENT OF THE COMPANY

Canara Bank is a completely professionally operated bank with highly qualified management
professionals who have several years of industry experience.

Shri L V Prabhakar, MD & CEO

Shri L V Prabhakar has over 34 years of rich industry experience

in banking, spread across a spectrum of domains. Prior to joining
Canara Bank, he worked as the Executive Director of Punjab
National Bank. He handled various verticals of the Bank viz.,
Credit, Treasury and Human Resources. He was also instrumental
in strengthening systems and procedures by taking initiatives
such as Stressed Assets Management Vertical, Digitization of
Trade Finance.

Management team and key executives

Name Designation

A Manimekhalai Executive Director

A V Rama Rao Group Chief Risk Officer

Arvind Kumar Asst. General Manager

Ashok Kumar Sahu General Manager

B Uma Sankar Chief Vigilance Officer

Bimal Prasad Sharma Shareholder Director

 D Vijay Kumar General Manager

Debashish Mukherjee Executive Director

E N Ranganatha General Manager

G V Prabhu Chief General Manager

Lingam Venkata Prabhakar Managing Director & CEO

M M Chiniwar Chief General Manager

M Paramasivam General Manager

Matam Venkata Rao Executive Director

N Lakshminarayana Chief General Manager

P Santosh General Manager

Pramod Kumar Chief General Manager

R Kesavan Nominee Director

R Mahendran Divisional Manager

S Krishnan Executive Director

S Ramesh Head - Internal Audit

S Srimathy Chief General Manager

Suchindra Misra Government Nominee Director

T N Manoharan Chairman

V Jayaraman Chief Technology Officer

V Ramachandra CFO & CGM

SWOT ANALYSIS OF CANARA BANK

The SWOT analysis of Canara Bank gives insights related to the bank’s strengths, weaknesses,
opportunities & threats by assessing both the internal factors as well as external factors
influencing the bank. The SWOT analysis is a proven management framework which can aid
in benchmarking business performance as compared to its other competitors in the banking
industry.
 Strengths Weaknesses

Opportunities Threats

Strengths

➢ The schemes provided by the bank are very innovative and versatile. It provides loans at
a low rate to rural areas, thus helping in uplifting the standard of living in these areas
➢ Provides a good banking experience to customers by implementing the best practices and
through creating and maintaining a good brand image
➢ In terms of technology advancement, the company is doing comparatively well as
compared to its peers

Weaknesses

➢ The bank is lagging in terms of marketing efforts and has low publicity despite having
being able to provide customers with good banking facilities and experience
➢ Customer service is one of the key differentiators between banks to gauge the
competitive advantage, especially in India where the banking environment is very
competitive. Canara bank has been unable to deliver good customer service
➢ Canara bank’s online banking facilities are also under-developed
➢ It also has a low international presence
➢ One inherent disadvantage that the bank faces is that it does not have a large client base
of high-income groups/ individuals. Most of the revenue it generates is from low-income
groups which does not significantly improve the bottom line of the bank, thereby stunting
its growth

Opportunities

➢ The bank has the opportunity to explore rural banking and offer banking products and
services that suit their needs
➢ The bank can leverage social channels in the age of social media and explore opportunities
in social banking
➢ Canara Bank can focus on expanding and increasing its overseas presence
Threats

➢ Increasing competition from private sector banks that are coming up with innovative
investment schemes that are lucrative to customers
➢ Changed in banking policies from RBI results in a direct impact on the bank’s operations

COMPETITIVE ANALYSIS

Parameters Canara Bank SBI Punjab National Bank

Market capitalisation 24,371.73 312,584.52 38,715.04
Net Profit -2,235.72 14,488.11 336.20
Total Assets 723,874.74 3,951,393.92 830,665.91
EPS -26.5 16.23 0.62
ROE -6.75 8.69 0.74
**Figures are in Rs. Crores, Year ended March 31, 2020

As compared to its other competitors in the public sector banking in India, Canara Bank seems
to be lagging behind in terms of every parameter in the analysis given in the table above. Its
negative profits yielded as well as negative EPS and ROE figures could be worrisome for the
bank and discourage investor interest. Comparatively, SBI and PNB seem to be doing much
better and have positive EPS and ROE, highlighting that the growth prospects for these
companies are larger. This shows that Canara Bank might not be a good investment
opportunity, if only these parameters are taken into consideration.

CONCLUSION AND WAY FORWARD

▪ Canara Bank is widely known for its customer centricity and has had a tremendous growth
trajectory in the past couple of years. Being one of the largest government-owned banks
in India, Canara Bank has enormous potential to increase its customer base and leverage
its wide range of consumer banking services.
▪ The way forward for Canara Bank would be to increase its marketing efforts and invest
more in terms of brand recognition and reach. The bank must explore opportunities
presented in rural banking and social banking. Further, the bank must leverage its best
practices to improvise in terms of delivering superior customer experience.