Dena may raise Rs 350 cr in FY09

Dena Bank is likely to raise Rs 300-350 crore capital in the next financial year to maintain a 24 per cent credit growth.Dena Bank’s capital adequacy ratio (CAR) would be a little over 11 per cent at the end of March, including the tier-I capital adequacy ratio of 7 per cent, he said.

The bank is constrained from raising equity capital as the government stake in the bank is at the minimum threshold of around 51 per cent.The bank had posted an extraordinary 176 per cent year-on-year net profit growth in 2006-07 due to a low base.

Read more in The Business Standard article.

Canara Bank eyes buyouts this year

Public sector Canara Bank has hinted that during the current year it may acquire a bank which can increase its footprint in the North and West India.Speculations are rife that Canara Bank had evinced interest in taking over Mumbai-Dena Bank, which has strong base in Northern and Western India.

On the issue of funding of any possible acquisition, Rao, CMD Canara Bank said Canara Bank has been one of the strong banks with good fundamentals. There is no problem as far as capital for acquisition is concerned, he said. The bank, in which the government holds a 73% stake, could consider acquiring a bank having government stake of about 51%.Later Rao added that the bank is looking at expanding its footprint in the North and West India, as it already has a good network of bank branches in the south.

Read more in The Times of India article.

Dena Bank to enter non-life insurance business

Dena Bank is in the process of forming a joint venture to foray into the non-life insurance sector along with other partners, chairman and managing director P L Gairola said on Friday.

The idea was at a conceptualisation stage and was yet to get approval of the board, Gairola told reporters on the sidelines of the Banking Conclave organised by FICCI (eastern region) here.

Dena Bank would hold 26 per cent stake in the proposed JV, he said, adding besides Dena Bank, there would be other domestic and foreign players.At present, the bank is selling products of LIC for life and Oriental Insurance for non-life.

During the current fiscal, the bank was eyeing a credit growth of 22 per cent and deposit growth of 23 per cent as compared to 27 per cent and 18 per cent respectively in the last financial year.

Gairola said that the bank was keen to maintain a capital adequacy ratio of 11 per cent during the year which at present was at 11.52 per cent.He said the bank did have headroom to raise Rs 8000 crore both in Tier I and Tier II.The bank was also in talks with State Bank of India to launch credit cards.

Canara Bank eyes Dena Bank

Canara Bank, the country’s third largest bank, has set its sights on mid-sized Dena Bank and has appointed Ernst & Young to explore the possibility of the deal. This sets into motion the government’s move to introduce consolidation among public sector banks.

Sources close to the development said the chairmen of both banks would meet shortly, after which the matter would be taken up by the respective boards and employees would be consulted.

Bangalore-based Canara Bank, which has a network of 2,542 branches, is strong in the south while Mumbai-based Dena Bank, with its 1,050 branches, has a large presence in Maharashtra, Gujarat and Chhattisgarh. It overtook Punjab National Bank in 2005-06 to become the country’s second-largest public sector bank in terms of advances and deposits.

The merger will help Dena Bank, which has just come out of a huge burden of sticky loans or non-performing assets (NPAs). Though it is now better off financially, it has a limited capital base to grow business at the rates that the banking sector has seen in the last three years.

Read more in The Business Standard article.