Shares of Canara Bank ended September 4's session in the red falling 2.5 percent to a new 52-week low.
The bank said that its board will meet next week on September 13 to consider capital infusion of up to Rs 9,000 crore through issuance of preferential equity shares to the government. The board will also consider amalgamation of Syndicate Bank with it.
"Meeting of board of directors of the bank is scheduled to be held on September 13, 2019, to consider the amalgamation of Syndicate Bank into Canara Bank and to consider capital infusion up to Rs 9,000 crore by government of India by way of preferential issue of equity shares subject to necessary approvals," Canara Bank said in a regulatory filing.
Canara Bank and Syndicate Bank merger will become the fourth-largest public sector bank with a business of Rs 15.20 lakh crore, which will be roughly 1.5 times of Canara Bank. It will have the third-largest branch network in India with 10, 342 branches, which will have a strong presence in South India.
The bank will have the potential to reduce huge cost due to network overlaps, a similar culture to enable smooth consolidation and cost-saving and income opportunities for joint ventures and subsidiaries.
Canara Bank has been down almost 30 percent in the last three months with the scrip shedding over 12 percent in the last three days.
Canara Bank ended at Rs 192.25, down Rs 4.95, or 2.51 percent. It has touched a 52-week low of Rs 190.65. The scrip touched an intraday high of Rs 198.90 and an intraday low of Rs 190.65.
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