The Hindu Business Line : PNB eyeing management control with equity stake in Bangla bank

PUNJAB National Bank (PNB) is eyeing management control with equity participation in a Bangladesh bank. Initial discussions on the issue have already taken place. PNB is interested in taking the negotiations forward.

While the name of the Bangladesh outfit is not being disclosed at the moment, PNB has made it clear that it is keen to work out an arrangement similar to that with Everest Bank of Nepal. PNB has 20 per cent stake in the Nepalese bank.

Mr S.C. Gupta, Chairman and Managing Director, told newspersons here on Saturday that, for PNB,the talks should lead towards its participation in terms of both management and equity. The proposal is part of the bank's attempt to augment presence in key overseas markets. PNB currently runs offices in four countries, and also has a branch in Kabul.

"Work on assessing the potential of certain other centres is in progress," he said. Markets such as Singapore, Hong Kong and Canada have been identified as crucial. A full-fledged branch in any of these places is likely to be opened by March 2006.

On another front, the bank is set to flag off its insurance venture (PNB Principal Insurance Advisory Co) in a big way. Clearance from the IRDA is awaited. With regard to its tie-up with Principal (which figures among large pension providers), PNB maintains that pension will soon play a key role in India. It will explore the possibility of joining hands with Principal for pension as and when the sector is opened up further.

PNB, which is targeting a 20 per cent growth this fiscal, hopes to sustain its credit growth, which stood at 27 per cent during 2004-05.

Mr Gupta said the bank was taking initiatives to improve credit delivery. Thegross NPA was likely to decline to 4.5 per cent by the end of the fiscal. Net NPA stood at 0.2 per cent at the end of March 2005. For the next few years, PNB would not need to expand its equity base, he said. The bank, meanwhile, is slated to add more teeth to some of its branches, 73 of which are specialised at this juncture.

It will focus on increasing fee-based income in the coming days. More branches will be brought under CBS (core banking solution) during the current fiscal. At present, 1,188 branches are under CBS.

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PNB eyeing management control with equity stake in Bangla bank