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Business News/ Industry / Dena Bank to raise `600 crore through QIP
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Dena Bank to raise `600 crore through QIP

Dena Bank expects `700 crore capital infusion from issuing preferential shares to the government

Dena Bank’s current capital adequacy ratio is 10.21%. Photo: MintPremium
Dena Bank’s current capital adequacy ratio is 10.21%. Photo: Mint

Mumbai: State-run lender Dena Bank is planning to raise 600 crore through qualified institutional placement (QIP) after it receives capital from the government, which is expected to happen by December-end.

“We expect 700 crore by way of capital infusion for which we will be issuing preferential shares to the government," bank’s chairman and managing director Ashwani Kumar said.

“Government’s share in our bank is 55.25% and maintaining the government share at the same level, we will raise QIPs which should be around 600 crore, depending on the price we will get."

The bank’s current capital adequacy ratio is 10.21%.

Financial services secretary Rajiv Takru had said banks would be allowed to raise capital from the markets in the proportionate amount infused by the government to maintain the government’s shareholding.

The finance ministry had last month cleared the 14,000 crore capital infusion plan for the public sector banks to improve their capital base. The infusion will ensure that banks have 8% Tier-1 capital by the end of the current fiscal year.

The government had infused 20,117 crore and 12,000 crore in public sector banks during 2010-11 and 2011-12, respectively.

Dena Bank reported a 55.19% decline in its net profit at 107.38 crore for the quarter ended 30 September 2013, on account of higher provisions.

The bank’s deposits increased by 12% to 93,669 crore in the quarter. Total advances in the quarter grew by 11% to 65,664 crore.

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Published: 10 Nov 2013, 07:26 PM IST
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