Home / Industry / Banking /  No stake sale, PNB to retain promoter status in subsidiary

NEW DELHI : Punjab National Bank will continue as a promoter of PNB Housing Finance Ltd (PNBHFL) even after the mortgage lender completes its rights issue, a top executive said.

The public sector bank has already got Reserve Bank of India approval to infuse up to 500 crore for subscribing to PNBHFL shares in the proposed rights issue of up to 2,500 crore, expected by December.

“Post-rights issue, the holding of the bank (in PNBHFL) would come down below 30%, but would be kept above 26% so that bank retains promoter status," managing director Atul Kumar Goel said in an interview.

Last year, private equity firm Carlyle Group and associates had sought to acquire a controlling stake of over 50% in PNBHFL through a 4,000 crore preferential issue of equity and warrants at 390 a share. However, the issue was terminated over valuation issues and delays due to legal proceedings. It was widely seen that PNB wanted to exit the management of its housing finance arm.

“Presently, the bank doesn’t have any plan to sell its stake in PNBHFL," Goel said. He, however, added that PNB will go ahead with its monetization plans, as some non-core activities have been identified after the merger of Oriental Bank of Commerce and United Bank of India with PNB.

“Post-amalgamation, we have rationalized our existing networks of branches, ATMS, offices etc. Some of the space freed has been used for setting up various verticals’ offices for greater operational efficiency. However, there is some scope for monetization," Goel said.

“As far as stake sale in non-core investment is concerned, these will be taken up for consideration at appropriate times and we will update the stakeholders in due course as required by the regulatory agencies," he added.

PNB has been looking to monetize its non-core assets including stakes in UTI AMC, life insurance ventures and asset reconstruction company

“We have planned for stake sale (in UTI AMC) in single or multiple tranches. Only after necessary approvals, we will take an appropriate decision regarding stake sale in one go or in tranches based on the market scenario and approaching stakeholders," said Goel.

PNB is also looking to expand its presence in geographies with poor branch penetration. The bank currently has over 10,000 branches covering most geographic areas. Goel said that the focus of the bank will be on organic business growth through strengthening its internal operations to generate more revenues.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout