India Financials

Saumya Agarwal

Equity Bottom-Up

Canara Bank reported its Q4FY21 results today. While FY21 ended with a net profit (versus a loss in FY20) what stood out was that Canara Bank would be setting off the accumulated losses against the share premium account. Canara Bank’s accumulated losses have almost doubled post its merger with Syndicate bank and this kind of accounting arrangement will help it to create distributable reserves i.e. making dividend payments or AT1 coupon payments. However, resolving the legacy woes would be crucial for sustaining the long-term profitability of the Bank.

Canara Bank reported its Q4FY21 results today. While FY21 ended with a net profit (versus a loss in FY20) what stood out was that Canara Bank would be setting off the accumulated losses against the share premium account. Canara Bank’s accumulated losses have almost doubled post its merger with Syndicate bank and this kind of accounting arrangement will help it to create distributable reserves i.e. making dividend payments or AT1 coupon payments. However, resolving the legacy woes would be crucial for sustaining the long-term profitability of the Bank. 

Canara Bank – Setting-Off the Accumulated Losses, Post Merger with Syndicate Bank