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Helped by a decent growth in core non-interest income, Dena Bank reported a 20 per cent increase in net profit at Rs 187 crore in the October-December 2011 period, against Rs 155 crore in the corresponding year-ago period.
The bank recorded a 27 per cent increase in core non-interest income of Rs 109 crore (Rs 86 crore in the October-December 2010 period).
Net interest income (the difference between interest earned and expended) increased by 16 per cent to Rs 541 crore (Rs 466 crore in the October-December 2010 period).
Credit growth
On the back of increased lending to the agriculture, micro, small and medium enterprises, and retail segments, the bank is expecting to end the financial year with a year-on-year credit growth of 20 per cent, Ms Nupur Mitra, Chairperson and Managing Director, Dena Bank said.
The bank achieved a y-o-y credit growth of 16 per cent up to December-end 2011.
“We will be placing more emphasis on improving non-interest income, including letters of credit and guarantees and retailing gold coins,” said Ms Mitra.
Preference shares
In its board meeting on Monday, the public sector bank decided to raise up to Rs 150 crore by issuing equity shares on a preferential basis to the Life Insurance Corporation of India. The bank expects to complete the preferential allotment in the current quarter.
According to Ms Nupur Mitra, Chairperson and Managing Director, Dena Bank, the capital infusion will increase the bank's capital-adequacy ratio by about 50 basis points to over 12 per cent.
Currently, LIC holds large stakes in two other public sector banks — Corporation Bank (23.75 per cent) and Oriental Bank of Commerce (8.87 per cent).
“We are planning for a 25 per cent growth in business. So, the funds from LIC will temporarily support our business growth plans,” said Mr Sudhir Kumar Jain, General Manager.
Ms Mitra informed that the capital is required to expand business further.
The bank expects the Government to infuse about Rs 500 crore in the next financial year.
Shares of Dena Bank ended 8.57 per cent up at Rs 79.80 per share on the BSE, against the previous close of Rs 73.50.
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