The Hindu Business Line : Dena Bank targets 100 pc growth in retail portfolio

DENA Bank has filed prospectus for its second public issue of Rs 80 crore that is expected to hit the market by January 15 at a price band of Rs 23-27.

The Executive Director of Dena Bank, Mr M.V. Nair, told reporters in Pune that the public issue would augment the bank's capital base from Rs 206 crore to Rs 286 crore and increase its capital adequacy ratio from the current level of 10.28 per cent to 12 per cent. The Government's holding in the bank will come down from 71 per cent to 51 per cent (post-issue), he said.

The lead managers for the public issue will be SBI Caps, ICICI Securities and AK Capital.

New plans: Mr Nair said the bank is now ready to take a quantum jump to emerge as a vibrant organisation that will leverage its infrastructure to offer value-added products and services to its customers.

Talking about the future growth plans, Mr Nair said the bank will focus on achieving a 100 per cent growth in its retail banking portfolio, which currently stands at Rs 700 crore.

He said the bank is in the process of setting up exclusive retail finmarts within its branches that will cater exclusively to nine retail loan products. "We plan to have 40 such finmarts by March 2005," Mr Nair said, adding that the finmarts will focus on launching innovative loan products for the retail segment.

On the anvil are loans for senior citizens up to a maximum limit of six months of their pension and loans for young professionals with a facility for stepped up repayment, he said.

New products: Meanwhile, the bank is also gearing up to launch a number of products in the next couple of months that will seek to leverage the power of the Internet.

It is now is ready to launch a cross-border remittance product for its non-resident Indian clients that will enable the latter to ensure remittance from six countries, including the UK, the US and Canada, within 48 hours via Internet, he said.

The bank has a strong presence in western India, with Gujarat (which has a very high percentage of the Indian population living abroad) being its number one market. "We want to encash our strength in Gujarat and Maharashtra, while still being in top cities," Mr Nair said.

It is charting out plans to close down non-profitable branches and open some branches and is currently working towards re-deploying staff to new areas.

The bank, which currently has a total business of Rs 29,800 crore, saw a 10.5-per cent growth in its deposits and a growth over 14 per cent in advances, according to Mr Nair.

He added that it will now focus on reducing its ratio of net non-performing assets (NPAs) to net advances to a level below 5 per cent by March 2005 (the ratio stood at 9.40 per cent on March 31, 2004).

The bank also plans to achieve 100 per cent computerisation by the end of December increase its ATM strength from 101 to 200 by March.

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