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Sunday, July 6, 2014

Dena Bank seeks Rs 1,200 crore fresh capital from government

State-run lender Dena BankBSE -0.24 % has sought Rs 1,200 crore capital infusion from government in the current fiscal, a top bank official has said.

In the interim Budget, the government had earmarked Rs 11,200 crore for capital infusion in public sector banks during 2014-15 and the new government has ruled out allocating more funds this fiscal for banks.

"We have asked for Rs 1,200 crore capital from the government but how much we will get we don't know," bank's executive director R K Takkar said.

The bank's total capital adequacy ratio stands at 11.14 per cent while the tier-I capital adequacy ratio stands at 7.43 per cent.

Last year, the government had infused Rs 700 crore into the Mumbai-based mid-sized lender as part of the overall Rs 14,000-crore recapitalisation of state-run banks.

In FY14, the bank deferred its plan to raise nearly Rs 570 crore through qualified institutional placement, owing to the weak market condition.

Takkar said that once the bank gets funds from the government, it may look at raising funds from other options such as a rights issue, qualified institutional placement, Esops or through tier II bonds.

"Currently, the government's holding in the bank is 58 per cent. Once the fresh capital comes in their share will increase to over 65 per cent and we will also have more room to raise funds," Takkar added.

Dena Bank had posted a net profit of Rs 187.28 crore for the March quarter up from Rs 125.67 crore a year ago.

Source: Economic Times
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