leading public sector lender Punjab National Bank (PNB) is likely to raise funds from market but the board would take its final decision by September-end on the amount and whether it would go for a rights issue or through the Qualified Institutional Placement route.
"We will firm up plans (on raising capital) by end of September," said PNB Chairman and Managing Director KR Kamath. He was speaking at the announcement of the Q1 results.
Currently, the Government of India holds 58.87 per cent stake in the bank while the remaining is with the public. The bank has headroom to dilute Government stake up to 51 per cent, the statutory ceiling and allowing banks to maintain public sector character.
The stake reduction up to 51 per cent would help bank to mobilize Rs 5,000 crore at the current market price. With this announcement shares of PNB closed at Rs 924 per unit, down 0.51 per cent on the BSE on Friday.
last fiscal, the bank got capital infusion of Rs500 crore from the Government. The fund infusion was done through preferential allotment of shares to the Government.
The fund support to PNB was part of the Rs 14,000 crore overall capital infusion plan for the public sector banks (PSBs). The state run bank on Friday announced its Q1 results wherein it has posted a 10.2 per cent growth in net profit at Rs1,405 crore during the April-June quarter, helped by a rise in interest income.
The bank had a net profit of Rs1,275 crore during the corresponding period of the previous fiscal. The total income rose to Rs12,825.13 crore as against Rs11,747 crore in the same quarter a year ago, according to Kamath.
Interest income increased by 11.4 per cent to Rs11,589 crore against Rs10,405 crore in the first quarter of the previous fiscal. The gross non-performance assets (NPA) as a proportion of advances went up significantly to 5.28 per cent against 4.84 per cent at the end of June last year. Net NPA also rose to 3.02 per cent from 2.98 per cent.
In absolute terms, the gross NPA rose by 30 per cent to Rs19,603 crore while net NPA increased by 15 per cent to Rs10,464 crore at the end of June 2014 on year-on-year basis.
"The area of NPA continues to engage our full attention. We have adopted consolidation policy...Next quarter NPA number should be quite better," he said. However, net interest income improved by 12.1 per cent to Rs4,380 crore as compared to Rs3,908 crore in the same period a year ago.
Net interest margin declined marginally to 3.42 per cent from 3.52 per cent in the same quarter a year ago. Total business of the bank, as on June 30, stood at Rs 7,92,405 crore, as against Rs 7,02,007 crore at end of first quarter of in 2013-14, registering 12.9 per cent growth.
On credit and deposit growth in the current fiscal, Kamath said, it should be between 15-16 per cent. "RBI has indicated credit deposit growth of 15-16 per cent for the current fiscal. Definitely, we should not be less than that," he said.
Asked about whether the bank is looking at acquisition of any bank in view of budget announcement, he said: "We are not looking at this at the moment. We need to get more clarity on that and then we will take a call."