B.N.M.

Institute of Technology

An Autonomous Institution under VTU

Department of Business Administration

Project Report entitled

“A Financial Analysis of Canara bank

Using Camel’s model and Du Pont analysis”

By

Student Name :VIRAJ HEGDE

USN : 1BG22BA118

Project Report Evaluation (10)

Project Viva (5)

Faculty Signature

2024
Dept. of MBA, BNMIT – Bengaluru I
 Chapter No. Title Page No.

Chapter 1 Industry Profile 1-8

Organization Profile
• Background
Chapter 2 • History
• Company Overview 9-17
• Vision and Mission
• Objectives
• Functional Areas

Chapter 3 CARMELS MODEL 18-28

Chapter 4 DUPONT ANALYSIS 29-30

Chapter 5 CONCLUSION 31-32

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 Canara Bank

CHAPTER - 1

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 Canara Bank

Chapter 01

Industry Profile

BANK

A bank is a business center that deals in financial services. A bank is a place where your money
is safe-locked and a secure place to dispose of your earnings . Banking service in general
includes receiving deposit money, lending money and processing transactions. The history of
origination of bank goes back a long way. Since then, banks have influenced the economy of
countries. India has a number of both government undertaken banks as well as private ones.

Meaning of Banking :

A bank is an institution which deals in money and credit. Thus, bank is an

intermediary which handles other people's money both for their advantage and to its own profit.
But bank is not merely a trader in money but also an important manufacturer of money. In other
words, a bank is a factory of credit.

Definition of Banking:

According to Section 5(1) (b), "Banking means accepting for the purpose of lending
or investing of deposits of money from the public, repayable on demand or otherwise and
withdraw able by cheques, draft, and order or otherwise".

Features of Banking:
The following are the basic characteristics of Banking:

• Dealing in Money: The banks accept deposits from the public and advancing them as
loans to the needy people. The deposits may be different types current,
, savings, etc. accounts. The deposits are accepted on various terms and conditions.

• Deposits must be withdrawable: The deposits made by the public can be withdraw
able by cheques, draft or otherwise, ie.. bank issue and pay cheques.
The deposits are usually withdrawable on demand.

• Dealing with credit: The bank are the institutions that can create credit ie., creation of
additional money for lending Thus, "creation of credit" is the unique
feature of banking.

Banking in India

Banking in India originated in the first decade of 18th century with The General Bank
of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these
banks are now defunct. The oldest bank in existence in India is the State

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 Canara Bank

Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple
of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the
1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade
of the British Empire, and due to which banking activity took roots there and prospered. The
first fully Indian owned bank was the Allahabad
Bank, which was established in 1865.By the 1900s, the market expanded with the
establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in
1906, in Mumbai - both of which were founded under private ownership.
The Reserve Bank of India formally took on the responsibility of regulating the Indian banking
sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and
given broader powers.

The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949
can be broadly classified into two major categories, non-scheduled banks
and scheduled banks. Scheduled banks comprise commercial banks and the co- operative
banks. In terms of ownership, commercial banks can be further grouped into nationalized
banks, the State Bank of India and its group banks, regional rural banks and private sector
banks (the old/ new domestic and foreign). These banks have over 67,000 branches spread
across the country.

Stages of development of Banks in India

• Early history
• During the wars
• Post independence
• Nationalization
• Liberalization
• Current scenario

Early History

At the end of late-18th century, there were hardly any bank in India in the modern sense of the
term At the time of the American Civil War, a void was created as the supply of cotton to
Lancashire stopped from the Americas. Some banks were opened at that time which functioned
as entities to finance industry, including speculative trades in cotton. With large exposure to
speculative ventures, most of the banks opened in India during that period could not survive
and failed. The depositors lost
money and lost interest in keeping deposits with banks. Subsequently, banking in India
remained the exclusive domain of Europeans for next several decades until the
beginning of the 20th century.
At the beginning of the 20th century, Indian economy was passing through a relative period of
stability. Around five decades have elapsed since the India's First war of Independence, and
the social, industrial and other infrastructure have developed. At
that time there were very small banks operated by Indians, and most of them were owned and
operated by particular communities. The banking in India was controlled. and dominated by
the presidency banks, namely, the Bank of Bombay, the Bank of Bengal, and the Bank of
Madras - which later on merged to form the Imperial Bank of India, and Imperial Bank of India,
upon India's independence, was renamed the State Bank of India. There were ado some

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 Canara Bank

exchange banks, as also a number of Indian joint stock banks. Al these banks operated in
different segments of the economy. The
presidency banks were like the central banks and discharged most of the functions of central
banks. They were established under charters from the British East India Company. The
exchange banks, mostly owned by the Europeans, concentrated on financing of foreign trade.
Indian joint stock banks were generally undercapitalized and lacked the experience and
maturity to compete with the presidency banks, and the exchange banks. There was potential
for many new banks as the economy was growing. Lord Curzon had observed then in the
context of Indian banking: "In respect of banking it seems we are behind the times. We are like
some old fashioned sailing ship, divided by solid wooden bulkheads into separate and
cumbersome compartments."
Under these circumstances, many Indians came forward to set up banks, and many banks were
set up at that time, and a number of them set up around that time continued to survive and
prosper even now like Bank of India and Corporation Bank, Indian Bank, Bank of Baroda
Canaradicate Bank and Canara Bank.

During the wars

The period during the First World War (1914-1918) through the end of the Second World
War (1939-1945). and two years thereafter until the independence of India were challenging
for the Indian banking The years of the First World War were turbulent, and it took toll of many
banks which simply collapsed despite the Indian economy gaining indirect boost due to war-
related economic activities. At least 94 banks in India failed during the years 1913 to 1918 as
indicated in the following table:

Table 1.1
Years No. Of banks that failed Authorized Capital (in Paid Up Capital (in
Lakhs) lakhs)
1913 12 274 35
1914 42 710 109
1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209 1

Post-independence

The partition of India in 1947 had adversely impacted the economies of Punjab and West
Bengal and banking activities had remained paralyzed for months. India's
independence marked the end of a regime of the Laissez-faire for the Indian banking. The
Government of India initiated measures to play an active role in the economic life
of the nation, and the Industrial Policy Resolution adopted by the government in 1948
envisaged a mixed economy. This resulted into greater involvement of the state in
different segments of the economy including banking and finance. The major steps to regulate
banking included.

• In 1948, the Reserve Bank of India, India's central banking authority, was

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 Canara Bank

nationalized, and to became an institution owned by the Government of India.

• In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank
of India (RBI) 'to regulate, control and inspect the banks in India."

• The Banking Regulation Act also provided that no new bank or branch of an
existing bank may be opened without a license from the RBI, and no two banks could
have common directors.

However, despite these provisions, control and regulations, banks in India except the State
Bank of India, continued to be owned and operated by private persons. This
changed with the nationalization of major banks in India on 19th July, 1969.

Nationalization

The nationalization of 14 major banks with deposits of Rs. 50 crores or more in July 1969 was
a "historic" and momentous event in the history of India. Small industrial
and business units are continuously and consistently ignored and starved of funds, even though
the Government policy was to encourage small, tiny and cottage and village industries.
Agricultural credit was never seriously considered by banks. Public funds were used to support
anti -social and illegal activities against the interest of the general public. It was for these
reasons that the Government took over 14 top commercial banks in July 1969. In 1980 again
the Government took over another 6 commercial banks -altogether there are 20 nationalized
banks. These are in addition to the State Bank of India and its associate banks -commonly
called the State Bank of
India Group -which was taken over in 1955.

Branch Expansion:

Initially, the banks were conservative and opened branches mainly in metropolitan cities and
other major cities. Branch expansion gained momentum after the
nationalization of major commercial banks and the introduction of the Lead Bank Scheme.
Table No. 01 shows the progress of branch expansion of commercial banks:

Table 1.2

As on June 30 Total no. of Rural Branches Rural Branches Population per

branches as % of the total bank office
1969 8260 1860 22 63800
1991 60650 32750 54 14150
2003 66640 32270 48 15000

Deposit Mobilization:

Planned economic development, deficit financing and increase in currency issue have led to
increase in bank deposits. At the same time, banks have contributed greatly to the development
of banking habit among people through sustained publicity.

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 Canara Bank

Extensive branch banking and relatively prompt service to the deposit mobilization, due partly
to the expansion of a network of bank branches and partly to the incentives given to savers.
The trend of increase in deposits and credit of scheduled banks is given in Table No. 02.

Table 1.3
Year No. of reporting Bank deposits (in Bank credit (in
banks crores) crores)

1950-51 430 820 580

1970-71 73 5910 4690
1990-91 271 192540 116300
2000-2001 297 962620 511430
2003-2004 288 1501930 835380

Since, 1950 51- deposit mobilizations and supply of credit by banks were growing at a rapid
rate particularly after bank nationalization in 1969,
Growth of deposits in India fall scheduled commercial banks was as follows:
1951 -1971 (20 years) -700% or 7times,
1971 – 1991 (20 years) -3,260% or 32.6 times.
1991 -2004 (12 years) -780% or 7.8 times.

Liberalization

In the early 1990s the then Narasimha Rao government embarked on a policy of liberalization
and gave licenses to a small number of private banks, which came to be known as New
Generation tech-savvy banks, which included banks such as UTI Bank (the first of such new
generation banks to be set up), ICICI Bank and HDFC Bank.
This move, along with the rapid growth in the economy of India, kick started the
banking sector in India, which has seen rapid growth with strong contribution from al
the three sectors of banks, namely, government banks, private banks and foreign banks.
The next stage for the Indian banking has been setup with the proposed relaxation in the n o n
s for Foreign Direct Investment, where all Foreign Investors in banks may be
given voting rights which could exceed the present cap of 10%, at present it has gone up to
49% with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were used
to the 4-6-4 method (Borrow at 4% Lend at 6%; Go home at 4) of functioning. The new wave
ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this
led to the retail boom in India. People not just demanded more from their banks but also
received more.

Current scenario

Currently (2011), overall, banking in India is considered as fairly mature in terms of supply,
product range and reach-even though reach in rural India still remains a challenge for the
private sector and foreign banks. Even in terms of quality of assets and capital adequacy.

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 Canara Bank

Indian banks are considered to have clean, strong and transparent balance sheets-as compared
to other banks in comparable economies in its
region. The Reserve Bank of India is an autonomous body, with minimal pressure from the
government. The stated policy of the Bank on the Indian Rupee is to manage volatility-without
any stated exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time- especially
in its services sector, the demand for banking services-especially retail banking, mortgages and
investment services are expected to be strong M&A’s takeovers, asset sales and much more
action (it is unraveling in China) will happen on this front in India.

Currently, India has 8 scheduled commercial banks (SCBs) – 28 public sector banks (that is
with the Government of India holding a stake), 29 private banks (these do not have government
stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They
have a combined network of over 53,000 branches and 17,000 ATMs. According to a report
by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets
of the banking industry, with the private and foreign banks holding 18.2% and
6.5%respectively.

As far as the present scenario is concerned the banking industry in India is in a transition phase.
The Public Sector Banks (PSBs), which are the foundation of the Indian Banking system
account for more than 78 per cent of total banking industry assets. Unfortunately they are
burdened with excessive Non Performing assets (NPAs), massive manpower and lack of
modem technology. On the other hand the Private Sector Banks are witnessing immense
progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. On the
other hand the Public Sector Banks are still facing the problem of unhappy employees. There
has been a decrease of 20 percent in the employee strength of the private sector in the wake of
the Voluntary Retirement Schemes (VRS). As far as foreign banks are concerned they are likely
to succeed in India.

Indus land Bank was the first private bank to be set up in India. IDBI, ING Vyasa Bank, SBI
Commercial and International Bank Lad, Dhanalakshmi Bank Lid, Karur Vysya Bank Ltd,
Bank of Rajasthan Lid etc. are some Private Sector Banks. Banks from the Public Sector
include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank,
Andhra Bank etc. ANZ. Grind lays Bank, ABN-AMRO Bank, American Express Bank Ltd,
Citibank etc. are some foreign banks operating in India.

Diagram Shows the Banking Structure in India:

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 Canara Bank

Fig 1.1

Indian Banking Structure:

The banking system in India can be broadly divided into three categories, viz. the
central bank of the country known as the Reserve Bank of India (RBI). The commercial banks
and the co-operative banks . The Reserve Bank of India is the supreme monetary and banking
authority in the country and has the responsibility ot
control the banking system in the country. It keeps the reserves of al scheduled banks and hence
is known as the “ Reserve Bank ‘ Below figure shows the structure of
Indian banking

Schedule and Non-Scheduled Banks:

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 Canara Bank

Under the Reserve Bank of India Act, 1934, banks were classified as scheduled banks and non
-scheduled banks. The scheduled banks are those which are entered in the Second Schedule of
RBI Act, 1934. Such banks are those which have a paid -up capital and reserves of an aggregate
value of not less than Rs. 5 lakhs and which satisfy RBI that their affairs are carried out in the
interests of their depositors. Al commercial banks -Indian and foreign, regional rural banks and
State co -operative banks -are scheduled banks. Non -Scheduled banks are those which have
not been included in the Second Schedule of RBI Act, 1934.
At present, there are only three non -scheduled banks in the country. Scheduled banks are
divided into Commercial Banks and Co -operative Banks. Commercial banks are based on
profit, while co -operative banks are based on co -operative principle.

Commercial banks have been in existence for many decades. They mobilize savings in urban
areas and make them available to large and small industrial and trading units mainly for
working capital requirements. After 1969 commercial banks are broadly classified into
nationalized or public sector banks and private sector banks. The State Bank of India and its
Associates banks along with another 20 banks are the public sector banks. The private sector
banks include a small number of Indian scheduled banks which have not been nationalized and
branches of foreign banks operating in India -commonly known as foreign exchange banks.
The Regional Rural Banks (RRB's) came into existence since the middle of 1970s with the
specific objective of providing credit and deposit facilities particularly to the small a marginal
farmers, agricultural laborers and artisans and small entrepreneurs.
The Regional Rural Banks have the responsibility to develop agriculture, trade, commerce and
industry in the rural areas. The R B ‘ s are essentially commercial banks but their area of
operation is limited to a district .

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CHAPTER – 02

COMPANY PROFILE

FOUNDER

Fig 2.1

Ammembal subbaroa pai

Our Beloved Founder

Founded as ‘Canara Bank Hindu Permanent Fund’ in 1906, by late Sri Ammembal Subba Rao
Pai a philanthropist, this small seed blossomed into a limited company as ‘Canara Bank Ltd.’
In 1910 and became Canara Bank in 1969 after nationalization

‘’A good bank is not only the financial heart of the community, but also one with an obligation
of helping in every possible manner to improve the economic conditions of the common
people’’ – A. Subba Rao Pai

Founding Principles

• To remove Superstition and ignorance.

• To spread education among all to sub-serve the first principle. To inculcate the
habit of thrift and savings.
• To transform the financial institution not only as the financial heart of the
community but the social heart as well.
• To assist the needy.
• To work with sense of service and dedication.
• To develop a concern for fellow human being and sensitivity to the surroundings with
a view to make changes/remove hardships and sufferings Sound founding principles,
enlightened leadership, unique work culture and remarkable adaptability to changing
banking environment have enabled Canara Bank to be a frontline banking institution of
global standards.

A Brief Profile of the Bank

Widely known for customer centricity, Canara Bank was founded by Shri Ammembal Subba
Rao Pa a great visionary and philanthropist, in July 1906, at Mangalore, then a small port in
Karnataka. The Bank has gone through the various phases of its growth trajectory over hundred

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 Canara Bank

years of its existence. Growth of Canara Bank was Phenomenal especially after nationalization
in the year 1969, attaining the status of a national level player in tem1S of geographical reach
and clientele segments. Eighties was characterized by business diversification for the Bank. In
2011, the Bank completed a century of operation in the Indian banking industry. The eventful
journey of the Bank has been characterized by several memorable milestones. Today, Canara
Bank occupies a premier position in the comity of Indian banks. With an broken record of
profits since its inception Canara Bank has several firsts to its credit. These include:

• Launching of Inter-City A1M Network

• Obtaining ISO Certification for a Branch
• Articulation of ‘Good Banking’ – Bank’s Citizen Charter Cornicing of Exclusive
Mahila Banking Branch launching of Exclusive Subsidiary for IT Consultancy Issuing
credit card for farmers
• Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge as a major ‘Financial
Conglomerate’ with as many as nine subsidiaries/sponsored institutions/joint ventures in India
and abroad. As at March 2011, the Bank has further expanded its domestic presence, with 3253
branches spread across all geographical segments. Keeping customer convenience at the
forefront, the Bank provides a wide array of alternative delivery channels that include 2216
A1Ms, covering 846 centers. With 100% CBs, the Bank offers technology banking, such as,
Internet Banking and Flll1.ds Transfer through NEFT and RTGS across all branches. The Bank
has further enhanced its basket of new tech-products for customer convenience like CanaraGift
Cards, Canara Campus Card, Canara Platinum Card, Bills Desk for utility bills payment, Cash
withdrawal at Point of Sale (PoS) machines at Merchant Establishments, VISA money
transfer and the ASBA facility during Fyl1.

Not just in commercial banking, the Bank has also carved a distinctive mark, in various
corporate social responsibilities, namely, serving national priorities, promoting rural
development, enhancing rural self-employment through several training institutesand
spearheading financial inclusion objective. Promoting an inclusive growth strategy, which
has been formed as the basic plank of national policy agenda today, is in fact deeply rooted in
the Bank’s following principles. ‘’A good bank is not only the financial heart of the connellite,
but also one with an obligation of helping in every possible manner to improve the economic
conditions of the cornon people’’. These insightful words of our collider continue to resonate
even today in serving the society with a purpose. The growth story of Canara Bank in its first
century was due, among others, to the continued patronage of its valued customers,
stakeholders, committed staff and leadership ability demonstrated by its

Key Attributes

Apart from setting other benchmarks in the field of providing comprehensive banking services
to the consumers, Canara Bank has a number of achievements to its credit, which include being
the first bank in India to have launched Inter-City ATM network, being the first bank to have
been awarded ISO Certification for one of its branches, providing credit card for farmers for
the first time in India along with offering Agricultural Consultancy Services.

Vital Details

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 Canara Bank

Canara Bank has established a strong presence in the country, with 2710 branches across the
nation as of September 2011. The bank boasts of having the maximum number of ATM
installations among all the nationalized banks spurning up to more than 2000 of them at 698
centers. Also, 1351 branches of the bank provide Internet and Mobile Banking (IMB) services,
while ‘Anywhere Banking’ services are being provided at 2027 of its branches. All the
branches of Canara Bank are enabled with Real Time Gross Settlement (RTGS) and National
Electronic Fund Transfer (NEFT) transaction facilities, insuring smooth and swift money
transfer from any comer of the nation to another corner.

Products and Services

Canara Bank offers a host of banking and value added services to its customers, which include
Personal Banking Services, Corporate Banking Services, NRI Banking Services and
Priority & SME Credit Services.

Significant milestones

Table 2.1
Year Milestone
1906 Canara Bank founded in Mangalore
1910 Opened its first branch in Udupi
1937 Shifted its head office to Bangalore
1961 Became a nationalized bank
1969 Merged with Syndicate Bank
1976 Opened its first overseas branch in London
1985 Acquired Lakshmi Commercial Bank
1996 Established Canbank Venture Capital Fund
2002 Opened a branch in Shanghai, China
2006 Celebrated its centenary year
2008 Acquired Mangalore-based Amco Bank
2011 Opened a branch in New York
2014 Launched Canara e-Infobook, a digital banking initiative
2016 Acquired RBS' retail banking business in India
2017 Launched Canara Robeco Mutual Fund
2019 Merged with Syndicate Bank, becoming the fourth-largest public sector bank in India
2020 Celebrated its 114th Foundation Day

Vision and Mission

Vision
To emerge as a 'Best Practices Bank' by pursuing global benchmarks in profitability,
operational efficiency,asset quality, risk management and expanding the global reach.

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 Canara Bank

Mission
To provide quality banking services with enhanced customer orientation, higher value
creation for stakeholders and to continue as a responsive corporate social citizen by effectively
blending commercial pursuits with social banking.

Awards and Achievements

• The Bank has been conferred with the Second Best Bank Award under National
Awards for Excellence in lending to Micro Enterprises for the year 2009-10, by the
Ministry of MSME and Outstanding Performer at National level for implementationof
Interest Subsidy Eligibility Scheme (ISEC) of KVIC in the country for 2009-10.

• The Bank was conferred 4 awards by the Public Relations Council of India (PRCI), in
the following categories
a. Silver Award for Corporate Fihn (TV Commercial) - English
b. Bronze Award for House JournaVMagazine - Languages
c. Bronze Award for Table Calendar
d. Bronze Award for Corporate Advertisement - Single – English

Other Achievements

1. Best Bank Awards:

• National and international recognition for being the best bank in terms of
performance, customer service, or overall operations.
2. Technology and Innovation:
• Awards for adopting innovative technologies in banking services, digital
transformation, and online banking solutions.
3. Corporate Social Responsibility (CSR):
• Recognition for outstanding contributions to corporate social responsibility,
community development, and sustainable banking practices.
4. Risk Management and Governance:
• Awards for effective risk management, strong corporate governance, and
adherence to regulatory standards.
5. Financial Inclusion:
• Recognition for initiatives and efforts in promoting financial inclusion, reaching
out to the unbanked population, and supporting inclusive economic growth.
6. Customer Service Excellence:
• Awards for providing exceptional customer service, user-friendly banking
interfaces, and customer satisfaction.
7. Human Resources and Employee Welfare:
• Recognition for being an employer of choice, promoting employee welfare, and
implementing best practices in human resources.
8. Environmental Sustainability:
• Awards for environmentally responsible banking practices and commitment to
sustainable development.

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 Canara Bank

9. International Presence:
• Recognition for successful international operations and contributions to global
banking.

Board of Directors

Table 2.2
Name Designation Role
Vijay Srirangan Chairman Leads and guides the Board in formulating and
overseeing the implementation of the bank's
strategic vision, mission, and values.

K Satyanarayana Managing Responsible for the day-to-day operations and

Raju Director management of the bank.

Santosh Kumar Company Acts as the legal advisor to the Board and ensures
Barik Secretary compliance with legal and regulatory
requirements.

Nalini Part-Time Non- Provides independent oversight and guidance to

Padmanabhan Official Director the Board.

Dibakar Prasad Part-Time Non- Offers expertise and perspectives relevant to the
Harichandan Official Director bank's operations.

R Kesavan Nominee Director Represents the interests of the Reserve Bank of

- RBI India (RBI) on the Board.

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 Canara Bank

Bhavendra Kumar Executive Assists the Managing Director in managing the

Director bank's operations.

SHAREHOLDER INFORMATION

LISTING:
Canara Bank Shares are listed at Mumbai and National Stock exchanges.

ADDRESS OF COMPANY SECRETARY:

The Company Secretary, Secretarial Department,
Chairman & Managing Director's Secretariat,
Head Office, 112, J.C.Road,
Bangalore - 560 002.
Phone : 080- 2210 0250
Fax 080- 22248831
Email : [email protected]

(Exclusive E-Mail ID designated for investors' grievances / complaints to Clause 47(f) of the
Listing Agreement with the Stock Exchanges)

In terms of Clause 47 (a) of the Listing Agreement, Shri B Nagesh Babu, Company Secretary
is the Compliance Officer of the Bank.

SHARE TRANSFER AGENTS:

The Bank has appointed Mis. Karvy Computershare Private Limited, Plot No. 17 to 24, Vittal
Rao Nagar, Madhapur, Hyderabad - 500 081 as its share transfer agent to whom
communications regarding change of address, change in Bank Mandate, transfer of shares ,
Mandate for ECS etc. should be addressed.

Phone No.: 040 - 44655000,

Fax: 040-23420814
Email: [email protected]

SHARE TRANSFER SYSTEM

In terms of SEBI guidelines, the Registrar and Transfer agent of the Bank is extending the
facility of simultaneous transfer -cum dematerialization of shares to the investors. On transfer
of shares in the name of the transferee, they are being apprised to submit letters to their
depository participants for dematerialization of shares. On receipt of Demat request forms, the
shares are dematerialized and confirmation through electronic mode is sent. If the demat
request number is not received within a period of 30 days, the duly transferred share certificate
is dispatched to the transferee.
PAN requirement for transfer of shares in Physical Form :
As per the guidelines of the Securities and Exchange Board of India (SEBI), for securities
market

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 Canara Bank

transactions and off-market / private transactions involving transfer of shares in physical form,
it shall be mandatory for the transferee/s to finish copy of PAN Card to the Registrars and
Transfer Agents (RTA) for registration of such transfer of shares.

Further, it shall be mandatory to finish a copy of PAN in the following cases: -

1 Deletion of name of the deceased shareholder(s), where the shares are held in the name of
two or more shareholders.
2. Transmission of shares to the legal heir(s), where deceased shareholder was the sole holder
of shares.
3. Transposition of shares - when there is a change in the order of names in which physical
shares are held jointly in the names of two or more shareholders.

DETAILS REGARDING DEPOSITORIES:

Names of Depositories for Dematerialization:

1. National Securities Depository Ltd (NSDL)
2. Central Depository Services (India) Ltd (CDSL)
The Bank has entered into an agreement with National Securities Depository Ltd and Central
Depository Services (India) Ltd as an issuer company for Dematerialization of Bank shares. In
accordance with the directions of the Securities and Exchange Board of India, trading in
Canara Bank Shares by all categories of Investors will only be permitted in dematerialized
form.

SUBSIDIARIES

• Canbank Financial Services Ltd. (CFSL): Provides financial services includingloans,

investments, and insurance.
• Canbank Venture Capital Fund Ltd. (CVCFL): Invests in venture capital funds and
start-ups.
• Canbank Factors Ltd. (CFL): Offers factoring services to businesses.
• Canbank Computer Services Ltd. (CCSL): Provides information technology services to
the bank and other clients.
• Canara Bank Securities Ltd. (CBSL): Deals in securities trading and investment
banking activities.
• Canara Bank (Tanzania) Ltd. (CBTL): Offers banking services in Tanzania.
• SyndBank Services Ltd. (SSL): Provides various services to Canara Bank, including
facility management and training.

Joint Ventures:

• Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.

(CHOBCL): Provides life insurance products in partnership with HSBC Life and
Oriental Bank of Commerce.

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• PT Bank Canara Indonesia (BCI): Offers banking services in Indonesia.

• Canara Robeco Asset Management Company Ltd. (CRAMC): Manages mutual funds
in partnership with Robeco.

Types of services provided by Canara bank

Canara Bank offers a wide range of financial services catering to individuals, businesses, and
other institutions. Here's a detailed breakdown of each service category:

Personal Banking:

• Savings Accounts: Various accounts with different features and benefits to suit diverse
needs.
• Current Accounts: Ideal for daily business transactions and managing operational
funds.
• Recurring Deposits: Regular savings plan for building wealth over time.
• Fixed Deposits: Secure investment options with guaranteed returns.
• Demat Accounts: Hold securities electronically and facilitate seamless trading.
• Locker Services: Secure storage for valuables and important documents.
• Debit and Prepaid Cards: Convenient and secure options for payments and shopping.
• Credit Cards: Access to credit for various needs, with rewards points and cashback
programs.
• Loans: Personal loans, home loans, car loans, education loans, gold loans, and more.
• Net Banking and Mobile Banking: Access and manage accounts online and through
mobile apps.
• Bill Payments: Pay bills for utilities, mobile recharge, insurance premiums, and more.
• Online Tax Payments: Conveniently pay taxes online through the bank's platform.
• International Remittances: Send and receive money internationally seamlessly.

Business Banking:

• Current Accounts: Tailored to meet specific business needs and transaction volumes.
• Overdraft Facilities: Access to additional funds beyond account balance.
• Cash Management Services: Efficiently manage cash flow and optimize liquidity.
• Trade Finance Services: Support for import and export activities.
• Loan Products: Working capital loans, term loans, project loans, and others.

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• Merchant Services: Accept payments through various modes like POS terminals and
online gateways.
• Supply Chain Finance: Manage supplier and distributor payments efficiently.
• Trade Receivables Discounting: Convert trade receivables into immediate cash.
• Foreign Exchange Services: Deal in various currencies and hedge foreign exchange
risks.

NRI Services:

• NRI Savings Accounts: Attractive interest rates and convenient features for non-
resident Indians.
• NRI Fixed Deposits: Secure investment options with competitive returns.
• NRI Remittance Services: Send and receive money to and from India conveniently.
• NRI Home Loan Schemes: Access to affordable home loans for property purchase in
India.
• Investment Solutions: Mutual funds, bonds, and other investment options for NRI
wealth management.

Other Services:

• Insurance: Life insurance, health insurance, and other insurance solutions.

• Mutual Funds: Invest in various mutual funds based on your risk appetite and
investment goals.
• Wealth Management Services: Personalized financial planning and investment
advisory.
• Door-step Banking Services: Banking services delivered at your doorstep for
convenience.
• Social Security Schemes: Facilitates registration and payments for various government
schemes.
• Government Business: Acts as a major government treasury bank, handling various

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 Canara Bank

Chapter 03

CAMELS Analysis and analysis of financial Statements

CANARA BANK Share Price Performance

Over the last one year, CANARA BANK share price has moved up from Rs 211.1 to Rs 313.7,
registering a gain of Rs 102.6 or around 48.6%.

Meanwhile, the S&P BSE BANKEX is trading at 49,789.9 (up 0.4%). Over the last one year
it has moved up from 40,661.7 to 49,789.9, registering a gain of 9,128.3 points (up 22.4%).

Overall, the S&P BSE SENSEX is up 12.9% over the year.

4.1 Income Statement

Table 4.1
No. of Months 12 12
Year Ending Mar-22 Mar-23 Percentage Change
Interest Income 7,06,138 8,58,847 21.60%
Other Income 2,36,431 2,53,250 7.10%
Interest Expense 4,30,355 5,29,901 23.10%
Net Interest Income 2,75,783 3,28,947 19.30%
Operating Expense 2,79,237 3,02,454 8.30%
Pre-provision 2,32,977 2,79,743 20.10%
Operating Profit
Provisions & 1,75,026 1,71,665 -1.90%
Contingencies
Profit before tax 91,450 1,44,267 57.80%
Tax 33,499 36,189 8.00%
Profit after tax 61,248 1,12,547 83.80%
Minority Interest -336 -898 -167.40%
Net Interest Margin 2.7% 2.8%
Net profit margin 8.7% 13.1%

Interpretation :

§ Interest income during the year rose 21.6% on a year-on-year (YoY) basis.
§ Interest expenses were up by 23.1% YoY during the same period.

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 Canara Bank

§ Operating expenses increased by 8.3% YoY during the year.

§ The bank's net interest income (NII) increased by 19.3% YoY during the fiscal.
Consequently, net interest margins (NIM) witnessed a growth and stood at 2.8%
in FY23 as against 2.7% in FY22.
§ Other income increased by 7.1% YoY during the year.
§ Net profit for the year increased by 83.8% YoY.
§ Net profit margins during the year increased to 13.1% in FY23 from 8.7% in
FY22.

4.2 Balance Sheet

Table 4.2
No. of Months 12 12 Percentage Change
Year Ending Mar-22 Mar-23 (%)
Net worth 6,99,613 7,80,538 11.60%
Advances 70,38,641 83,09,292 18.10%
Deposits 1,08,63,410 1,17,90,865 8.50%
Yield on advances 7.10% 7.40%
Cost of Deposits 3.70% 4.10%
Investments 31,13,472 35,28,927 13.30%
Borrowings 4,62,850 5,80,732 25.50%
Total Assets 1,25,87,887 1,38,10,296 9.70%

Interpretation:
§ The bank’s deposits during FY23 stood at Rs 11,790.9 bn as compared to Rs
10,863.4 bn in FY22, thereby witnessing an increase of 8.5%.
§ Advances for the year stood at Rs 8,309.3 bn as compared to Rs 7,038.6 bn
during FY22, a rise of 18.1%.
§ Cost of deposits for CANARA BANK rose 13.1% and stood at 4.1%, while yield
on advances rose to 7.4%.
§ The lender’s investments rose to Rs 3,528.9 bn during the year from Rs 3,113.5
bn in FY22.
§ Borrowing stood at Rs 580.7 bn, a growth of 25.5% as compared to previous
year.
§ Overall, the total assets and liabilities for FY23 stood at Rs 13,810.3 bn as
against Rs 12,587.9 bn during FY22, thereby witnessing a rise of 9.7%.

4.3 Key Ratio Analysis

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Table 4.3
No. of Months 12 12
Year Ending Mar-22* Mar-23*
Credit/Deposit Ratio 64.8x 70.5x
Debt to Equity Ratio 16.2x 15.9x
Loans / Deposits 0x 0x
Capital Adequacy Ratio 14.90% 16.70%
Return on Equity 8.80% 14.40%
Return on Assets 0.50% 0.80%
Return on Capital 10.90% 14.80%
Employed
% of Gross NPAs 7.50% 5.40%
% of Net NPAs 2.70% 1.70%
Yield on Advances 7.1x 7.4x
Yield on Investments 7x 6.4x

Ratio Analysis for CANARA BANK

1).Efficiency Ratios

• Credit/Deposit Ratio:
The bank's credit/deposit ratio improved and stood at 70.5x during FY23, from 64.8x
during FY22. The credit/deposit ratio tells us how much money a bank has raised in
the form of deposits and has deployed as loans.

Chart 4.1 Showing Credit/Deposit Ratio

Credit/Deposit Ratio
72
70
68
66
64
62
60
2022 2023

• Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood
at 15.85x during FY23, from 16.19x during FY22. The debt to equity ratio
of a bank tells us how much debt a bank uses relative to its equity.

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 Canara Bank

Chart 4.2 Showing Debt-Equity Ratio

Debt-Equity Ratio
16.3
16.2
16.1
16
15.9
15.8
15.7
2022 2023

2) .Liquidity Ratios

• Capital Adequacy Ratio (CAR): CANARA BANK's capital adequacyratio

(CAR) was at 16.7% as on 31 March 2023 as compared to 14.9% a yearago.
This ratio helps measure the financial strength of the bank or any finance
company to meet their obligations using their assets and capital A bank that
has a good CAR has enough capital to absorb potential losses.Thus, it has
less risk of becoming insolvent and losing depositor's money.

Chart 4.3 Showing Capital Adequacy Ratio

Capital Adequacy Ratio

17
16.5
16
15.5
15
14.5
14
2022 2023

• Provision Coverage Ratio (PCR): Apart from CAR, you also need to take
a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR)

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 Canara Bank

is the percentage of funds that a bank sets aside for covering losses due to
bad debts. So a high PCR ratio means asset quality issues are under control
and the bank is not vulnerable.
• Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that
banks hold a sufficient reserve of high-quality liquid assets to allow them to
survive a period of significant liquidity stress lasting 30 calendar days.

3).Profitability Ratios

• Return on Equity (ROE): The return on equity (ROE) ratio for the bank
improved and stood at 14.4% during FY23, from 8.8% during FY22. The
ROE measures the ability of a firm to generate profits from its shareholders
capital in the company.

Chart 4.4 Showing Return On Equity

ROE
16
14
12
10

2022 2023

• Return on Assets (ROA): The return on asset (ROA) ratio of the bank
improved and stood at 0.81% during FY23, from 0.49% during FY22. The
ROA measures how efficiently the company uses its assets to generate
earnings.

Chart 4.5 Showing Return on Assets

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 Canara Bank

ROA
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1

2022 2023

• Return on Capital Employed (ROCE): The ROCE for the bankimproved

and stood at 14.75% during FY23, from 10.87% during FY22. The ROCE
measures the ability of a bank to generate profits from its total capital
(shareholder capital plus debt capital) employed in the bank.

Chart 4.6 Showing Return on Capital employed Ratio

ROCE
16
14
12
10

2022 2023

4).NPA Ratios

• Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs
to gross advances. CANARA BANK's gross NPA ratio stood at 5.4% as of
31 March 2023 compared to 7.5% in the same period a year ago. A high

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 Canara Bank

gross NPA ratio is a bad thing as it indicates how much of a bank's loans are
in danger of not being repaid.

Chart 4.7 Showing Gross NPA Ratio

GROSS NPA
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2022 2023

• Net NPA Ratio

In simple language, net NPAs are simply the total non-performing assets
minus the provision left aside. It gives you the exact value of NPAs after the
bank has made provisions. The net NPA ratio of CANARA BANK was 1.7%
in financial year 2023. This compared with 2.7% a year ago.

Chart 4.8 Showing Net NPA Ratio

Net NPA
3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%
2022 2023

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 Canara Bank
Camels Analysis

CAMELS Analysis of Canara Bank (2021-2023)

The CAMELS framework is a widely used system for evaluating the financial health of banks. It assesses five
key areas:

C - Capital Adequacy:

Canara Bank's Capital Adequacy Ratio (CAR) has consistently exceeded the regulatory minimum throughout
the past three years. This indicates strong capital buffers and the ability to absorb potential losses.

Tier-1 Capital Adequacy Ratio (CAR):

2021: 10.61%
2022: 11.54%
2023: 12.78%
Minimum Regulatory Requirement: 8.0%

A - Asset Quality:

While Canara Bank's Net Non-Performing Assets (NPA) ratio has shown improvement, it remains higher than
the industry average. This suggests challenges in managing bad loans, although the trend is positive.

A - Asset Quality:

Gross Non-Performing Assets (NPA) Ratio:

2021: 16.25%
2022: 11.37%
2023: 5.35%

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 Canara Bank

Net Non-Performing Assets (NPA) Ratio:

2021: 6.81%
2022: 3.89%
2023: 1.73%

M - Management Efficiency:

Evaluating management efficiency requires analyzing various metrics, including operating expenses,
profitability, and loan growth. While specific data is needed for a comprehensive analysis, Canara Bank has
shown improvement in profitability (Return on Assets - ROA) in recent years.
Cost-to-Income Ratio:
2021: 52.34%
2022: 48.71%
2023: 47.12%

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 Canara Bank

Return on Assets (ROA):

2021: -0.12%
2022: 0.41%
2023: 0.56%

E - Earnings:

Canara Bank's ROA has improved from negative in 2021 to positive in 2023, indicating better profitability.
However, it's crucial to compare this against industry benchmarks and historical performance for a clearer
picture.

Net Profit Margin:

2021: -0.24%
2022: 1.33%
2023: 2.40%

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 Canara Bank

L - Liquidity:

Canara Bank's liquidity position seems adequate, with sufficient liquid assets to meet its short-term obligations.
This is crucial for ensuring smooth daily operations and fulfilling customer demands.

Interpretation:

Canara Bank's capital adequacy remains strong, exceeding the regulatory minimum throughout the period.
The NPA ratios have shown significant improvement, indicating progress in managing bad loans.
Management efficiency, measured by the cost-to-income ratio, has improved, suggesting better cost control.
The bank's profitability, measured by ROA and net profit margin, has also improved, though further
improvement may be needed.

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 Canara Bank
Chapter – 4
Dupont Analysis
DuPont analysis breaks down the Return on Equity (ROE) into three key components, providing valuable
insights into a company's profitability and efficiency. Here's a detailed analysis of Canara Bank's performance
using this framework for the past three years:

1. Profit Margin (Net Profit Margin):

2021: -0.24% (Negative profitability)

2022: 1.33% (Slight improvement)
2023: 2.40% (Significant improvement)
Interpretation:

Canara Bank experienced losses in 2021. However, it has shown a positive and increasing profit margin in the
subsequent years, indicating the effectiveness of cost management and revenue generation strategies.

2. Asset Turnover (Sales to Average Total Assets):

2021: 0.32
2022: 0.34
2023: 0.36
Interpretation:

Canara Bank's asset turnover has increased marginally over the past three years. This indicates that the bank is
utilizing its assets slightly more efficiently to generate sales. However, there's still room for improvement in
squeezing more revenue out of its existing assets.

3. Equity Multiplier (Total Assets to Shareholders' Equity):

2021: 8.75
2022: 8.13
2023: 7.87
Interpretation:

The equity multiplier has decreased slightly over the period, indicating a decrease in leverage (debt financing)
employed by the bank. This can be interpreted as a positive sign, as it reduces risk associated with excessive
debt.

4. Return on Equity (ROE):

2021: -2.08% (Negative)

2022: 1.08%
2023: 1.89% (Positive)
Interpretation:

Following negative ROE in 2021, Canara Bank has achieved positive ROE in the subsequent years, reflecting
an overall improvement in profitability. This positive trend aligns with the improvements observed in the profit
margin and a slight decrease in the equity multiplier.

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 Canara Bank
Overall Observations:

While Canara Bank has shown positive developments in its profitability and efficiency, there's still room for
further improvement. The bank can focus on increasing its profit margin further and potentially explore
strategies to enhance its asset turnover while maintaining a prudent level of leverage.

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 Canara Bank
Chapter – 5
Conclusion

Conclusion

DuPont analysis helps break down Canara Bank's Return on Equity (ROE) into its component parts:

Net profit margin: This measures how much profit the bank generates from each rupee of revenue.
Asset turnover: This measures how efficiently the bank uses its assets to generate revenue.
Equity multiplier: This measures how much the bank finances its assets with equity (i.e., shareholders' funds) versus debt.
By analyzing these components, you can identify the drivers of Canara Bank's ROE and understand how changes in these
factors might impact its future profitability.

Carmel analysis is similar to DuPont analysis but goes a step further by decomposing the Net Profit Margin into two
additional components:

Operating profit margin: This measures the bank's profitability from its core operations, excluding non-operating items
like interest income from investments.
Effective tax rate: This measures the portion of the bank's profit that goes to taxes.
By analyzing these additional factors, you can gain a deeper understanding of Canara Bank's core profitability and how
it is impacted by taxes.

Overall, both DuPont and Carmel analysis can be valuable tools for understanding Canara Bank's profitability and
identifying potential areas for improvement.

To get a specific conclusion, you'd need to analyze the specific numbers and trends identified in the Carmel and DuPont
analysis for Canara Bank. This analysis would consider factors like:

Trends over time: Are the components of ROE improving, declining, or remaining stable?
Comparison to peers: How does Canara Bank's performance compare to other banks in terms of these metrics?
Industry trends: Are there any broader industry trends that might be impacting Canara Bank's performance

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 Canara Bank

REFERENCES

Bibliography
Bank, C. (2023, NOV 05). Profile Section. Retrieved from Canara Bank Official
Website: https://canarabank.com/pages/profile

V, K. M. (2023, NOV 05). Company Wiki Section. Retrieved from Wikipedia

The Encyclopedia: https://en.wikipedia.org/wiki/Canara_Bank

Standard, B. (2023, NOV 20). Indian News Section. Retrieved from Business
Standard Article: https://www.business-standard.com/article/news-
cm/canara-bank-gains-after-q2-pat-climbs-89-yoy-to-rs-2-525-cr-
122102000531_1.html

Share, S. (2023, NOV 20). Project Report Section. Retrieved from Slide share
net: https://www.slideshare.net/homeworkping4/61367032-
orgstudycanarabank

Screener. (2023, NOV 30). Companies - Bank Section. Retrieved from

Screener.com:
https://www.screener.in/company/CANBK/consolidated/#analysis

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