Dena Bank plans to raise Rs500 cr through Tier I capital

Dena Bank plans to raise Rs500 cr through Tier I capital
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First Published: Sun, Jul 26 2009. 10 44 AM IST
Updated: Sun, Jul 26 2009. 10 44 AM IST
Mumbai: Public sector lender, Dena Bank, plans to raise Rs500-crore in its Tier-1 structure this fiscal, a top bank official said.
“We have requested the government for raising Rs500 crore through Tier I in the current year. The equity may be on a preferential basis,” Dena Bank’s chairman and managing director, D L Rawal, told the agency in Mumbai.
The government is considering our request and I think we should get approval,” Rawal said.
Despite the difficult business environment, the bank was able to register good results in Q1 FY 10. The net profit jumped by 68.40% at Rs115.02-crore in Q1 FY 10, as compared to a net profit of Rs68.30-crore in the same period last year.
Total income rose to Rs1,123.82-crore in the latest quarter as against Rs834.40-crore in the same period previous fiscal.
Interest income increased by 26.19% at Rs968.47-crore in Q1 FY 10 as compared to Rs767.46-crore in same period last year.
The bank’s total deposits grew to Rs42,744-crore.
The bank is now focussing on current account and savings account (CASA) accretion, Rawal said.
CASA during Q1 FY 10 grew at 36.43% as compared to 39% last year. “We will be able to mobilise good CASA following 100% implementation of core banking solution in our branches and other IT initiatives this year,” Rawal said.
The bank is hopeful of bringing down cost of deposits from 6.44% in Q1 FY 10 to around 6% by end- fiscal. The bank has repriced Rs1,200-crore worth high-cost deposits in Q1 FY 10. The bank is hopeful of repricing deposits worth Rs2,472-crore in the December quarter and Rs4,800-crore worth deposits in the March quarter,“ Rawal said.
To maintain better asset quality, the bank is setting up a robust credit monitoring mechanism and undertaking an aggressive recovery drive to reduce NPAs and action under SARFAES, he said.
The Bank’s gross NPA ratio has come down by 0.25% at 2.22% a on YoY basis and its net NPA ratio stands at 1.26%.
The bank has restructured 9,247 accounts aggregating to Rs614-crore last year and restructured another 241 accounts aggregating to Rs110-crore after March 2009 of which 929 accounts of Rs44-crore were of the SME sector, Rawal said.
Commenting on expansion plans, Rawal said, the bank has sought permission from Reserve Bank of India (RBI) for 137 new branches. The bank is hopeful of opening 100 new branches during FY 10 and three new corporate business branches at metro cities and eight retail asset centers, he said.
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First Published: Sun, Jul 26 2009. 10 44 AM IST