The Hindu Business Line : PNB to raise Rs 2,100-cr additional capital

MR S.C. GUPTA, CMD, Punjab National Bank, (left) with Mr K. Raghuraman, Executive Director, at a press conference in the Capital on Monday. -- Kamal Narang

New Delhi , July 31

Punjab National Bank (PNB) plans to raise additional capital of about Rs 2,100 crore to fund its expected business growth for the current fiscal, its Chairman and Managing Director, Mr S.C. Gupta, has said.

"We are going to raise both tier-I and tier-II capital through innovative debt and hybrid instruments. We had plans to raise a total of Rs 3,000-crore capital this year, of which Rs 885 crore has already been raised as tier-II capital in the first quarter. The remaining Rs 2,100 crore will be raised in one or two tranches. There is likely to be one before September," Mr Gupta told presspersons here today.

Asked whether PNB would opt for the foreign currency window for raising tier-II capital, its Executive Director, Mr K. Raghuraman, later said that the bank was examining various alternatives from the cost point of view. "Back of the envelope calculation suggests that it may not be cost-effective for us to raise capital from abroad through bonds. But we have not come to any definite judgement on this issue," he said.

Income up

PNB has reported a net profit of Rs 367.52 crore for the quarter ended June 30, 2006, reflecting an increase of 2.61 per cent over the net profit of Rs 358.16 crore recorded in the same quarter last year.

Total income of the bank for the period under review increased by 14.9 per cent to Rs 2,922 crore (Rs 2,543 crore).

The board of directors of PNB, which met here today, declared a final dividend of 60 per cent (Rs 6 per share) for the financial year 2005-06. With the declaration of final dividend, the total dividend for 2005-06 stood at 90 per cent (including the interim dividend of 30 per cent paid in December 2005).