State-run lender Dena Bank is planning to raise Rs 600 crore through qualified institutional placement (QIP) after it receives capital from the Government, which is expected to happen by December-end.
“We expect Rs 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 per cent and maintaining the Government share at the same level, we will raise QIPs which should be around Rs 600 crore, depending on the price we will get.”
The bank’s current capital adequacy ratio is 10.21 per cent.
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 Rs 14,000 crore capital infusion plan for the public sector banks to improve their capital base. The infusion will ensure that banks have 8 per cent Tier-1 capital by the end of the current fiscal year.
The Government had infused Rs 20,117 crore and 12,000 crore in public sector banks during 2010-11 and 2011-12, respectively.
Dena Bank reported a 55.19 per cent decline in its net profit at Rs 107.38 crore for the quarter ended September 30, 2013, on account of higher provisions.
The bank’s deposits increased by 12 per cent to Rs 93,669 crore in the quarter. Total advances in the quarter grew by 11 per cent to Rs 65,664 crore.