Date:25/07/2006 URL: http://www.thehindubusinessline.com/2006/07/25/stories/2006072503590600.htm

Back Dena Bank to raise Rs 675 cr thru bonds

Our Bureau

Posts Rs 18.5-cr net for Q1; aims 25 pc growth in deposits

Growth plans
The bank will focus on the SME and retail segment for its growth.
It is targeting a 20 per cent growth in fee income.
The bank has also received approval for the management of an exchange house in the UAE and is likely to start operations within two months.

IN THE BLACK: Mr P.L. Gairola (right), Chairman & Managing Director, Dena Bank, and Mr U.S. Kohli, Executive Director, at a press conference in Munbai on Monday. - Shashi Ashiwal

Mumbai , July 24

Public sector bank Dena Bank is planning to raise Rs 675-crore capital through innovative perpetual debt instruments, upper Tier II debt instruments and subordinated bonds. The bank will wait for an opportune time to issue the instruments, said Mr P.L. Gairola, Chairman and Managing Director, Dena Bank.

The bank has got its board approval to raise Rs 125-crore of hybrid Tier I capital, Rs 300 crore as upper Tier II capital and Rs 250 crore through subordinated bonds for Tier II capital.

Profit in Q1

The bank posted a net profit of Rs 18.49 crore for the quarter ended June 30, 2006 against a loss of Rs 189.3 crore in the corresponding quarter last year.

Net interest income was Rs 197.36 crore (Rs 189.05 crore). Other income declined to Rs 69.47 crore (Rs 77.72 crore) due to fall in treasury income.

Total deposits increased to Rs 24,171 crore (Rs 21,267 crore). Total advances increased to Rs 15,178 crore (Rs 11,848 crore).

For this fiscal, the bank has set a target of 25 per cent growth in deposits, Mr Gairola said.

Its capital adequacy ratio was 10.46 per cent (9.52 per cent). The proportion of net NPAs to total assets was 3.25 per cent (4.73 per cent).

"We have a robust monitoring system in place. High value written-off accounts are being tackled. We are also going in for aggressive settlement of NPAs," Mr Gairola said.

The plan is to reduce the net NPA level to 1.5 per cent by the end of this fiscal, he added.

For the financial year 2006-07, Dena Bank will focus on the SME and retail segment for its growth. It is targeting a 20 per cent growth in fee income.

The bank has also received approval for the management of an exchange house in the UAE and is likely to start operations within two months. "This will bring in more remittances and NRI deposits," Mr Gairola said.

Shares of Dena Bank ended at Rs 21.25 against the previous close of 20.75 on the BSE on Monday.