Canara Bank, the largest gold loan provider among public sector banks in India, is not only bullish on gold loans but also on its insurance arm. The bank announced its plan to divest a 14.5% stake in Canara HSBC Life Insurance through an initial public offering (IPO). This news caused Canara Bank shares to surge over 8% to a 52-week high of ₹127.90 [dafa4df3].
The decision to divest the stake in the insurance arm comes as Canara Bank aims to raise ₹8,500 crore in FY25 through debt instruments. This move is part of the bank's strategy to strengthen its financial position and support its growth plans. Canara Bank's shares have gained nearly 102% in the past year, with the stock hitting a 52-week low of ₹58.33 in June 2023 [dafa4df3].
While Canara Bank is focusing on expanding its gold loan portfolio and divesting its stake in the insurance arm, the bank remains committed to maintaining a robust compliance framework. The bank's success in the gold loan segment is attributed to the implementation of robust compliance measures and the strict quarterly review of its gold loan portfolio. Canara Bank's bullish stance on gold loans aligns with the Department of Financial Services' directive for all public sector banks to review their gold loan portfolios for regulatory compliance [85f2512c].