Government-owned power sector lender Power Finance Corporation on Thursday said it is looking to buy equity stake in a public sector bank.
PFC has written to the Ministries of Finance and Power expressing its interest to pick up "substantial stake" in a public sector bank, said the company's Chairman and Managing Director, Satnam Singh.
Asked what he means by a substantial stake, Singh said, "The stake that will allow PFC to add a board member."
The Government lender has decided to pay total dividend of 70 per cent, which comprises interim dividend of 60 per cent and final dividend of 10 per cent.
Q4 RESULTS
PFC has reported a 58 per cent increase in its net profit during the fourth quarter of 2012-13 at Rs 1,294 crore (Rs 818 crore).
Singh said that the higher net profit is on account of its spread increasing by 66 basis points to 2.99 per cent from 2.33 per cent.
Spread is the difference between lending rate and borrowing cost. The financier gains when the difference increases.
PFC's net income in the fourth quarter 2013-14 increased by 27 per cent to Rs 4,670 crore (Rs 3,684 crore).
The company has reported non-performing assets of Rs 1,135 crore against loan asset of Rs 1.6 lakh crore as on March 31, 2013.
PFC has exposure of Rs 7,500 crore to gas-based power plant. Of this, Konaseema Gas Power Ltd is reported as non-performing asset. PFC has an exposure of Rs 368 crore to the project.
COMPLETE YEAR
In 2012-13, PFC reported 46 per cent increase in its profit after tax at Rs 4,420 crore (Rs 3,032 crore). Its income rose by 32 per cent to Rs 17,273 crore (Rs 13,037 crore).
The lender plans to borrow Rs 44,000 crore in 2013-14 up from Rs 40,000 crore in the previous year. This will be mix of rupee and foreign currency loans.
Currently, domestic loans are cheaper compared to dollar. Rupee loans are available around 8.05 per cent.
In 2012-13, PFC net worth is up 15 per cent to Rs 22,351 crore (Rs 19,493 crore).