The Board of Punjab & Sind Bank (PSB), a public sector bank, have approved capital raising of upto ₹250 crore in one or more tranches within 12 months.

“Bank’s Board has approved the ₹250 crore capital raising plan. We are building a cushion for the future. Though our bank is well capitalised now, we think our bank should create a capital buffer in view of the robust credit growth”,  Swarup Kumar Saha, Managing Director & CEO, told businessline.

For the capital raising plan, Saha said that bank has kept all options open and may go in for either equity or bonds issuance depending on market conditions.

“Looking at the credit growth, we feel we need to create some capital buffer. As of end December 2022, our credit growth has been over 16 per cent year-on-year and deposits have grown over 9 per cent”, Saha said.

As of end September 2022, bank’s credit growth stood at about 9 per cent on a year-on-year basis. 

Saha said that PSB was well on track to meet the earlier guided credit growth of 15 percent for the current fiscal. “Iam keeping the credit growth guidance given earlier intact. I am creating some capital buffer for this growth”, he said. 

For the current fiscal, PSB is aiming at an overall credit growth of 15 per cent on the back of strong push towards Retail Agriculture and MSME (RAM) segment. Last fiscal, overall credit growth stood at 3.8 per cent.

Saha said that timing of tapping the capital will be decided post the third quarter results and after factoring in market conditions. “We have taken approvals from the Board for 12 months period. We will also keep the option of going in for QIP open. Both the option of equity shares and Basel III compliant bonds are open. QIP issue may take time to get it implemented. Bond issue we can get it implemented immediately”, Saha added.

For the quarter ended September 30, 2022, the PSB had reported a 27.5 percent increase in net profit at ₹278 crore (₹218 crore). In the June 2022 quarter, PSB had recorded net profit of ₹205 crore.

PSB is looking to clock a net profit of ₹1,100-1,200 crore this fiscal. Last fiscal, the bank’s net profit stood at ₹1,039 crore.