PNB to raise Rs 3,200 crore from share sale this quarter

The bank had taken approval for raising Rs 14,000 crore through a mix of equity and debt.

New Delhi: State-owned Punjab National Bank on Saturday said it plans to raise Rs 3,200 crore from share sale during the current quarter to enhance its capital base.

The bank has raised Rs 3,788.04 crore from qualified institutional placement (QIP) in December following which the government holding in the bank came down from 85.59 per cent to 76.87 per cent.

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The bank had taken approval for raising Rs 14,000 crore through a mix of equity and debt. As per the plan, the bank decided to raise Rs Rs 3,000 crore from AT-1 bonds, Rs 4,000 crore from Tier II bonds and Rs 7,000 crore from QIP.

“We have already taken Rs 4,000 crore from Tier-II and Rs 3,788 crore we have taken through QIP as at the end of December. In the month of January we have also taken AT-1 of another Rs 500 crore. So I am very confident that remaining Rs 2,500 crore of under Additional Tier-1 bonds will be garnered from the market before March 31,” PNB Managing Director S S Mallikarjuna Rao said.

Talking to the media after result, he said, “We are also actively looking at going for the QIP again with respect to the remaining Rs 3,200 crore to be acquired from the market at an appropriate time…it could be in this fiscal also.”

However, he said, current level of capital adequacy ratio is sufficient to take care of not only the requirement in the month of March 2021 but also during the next financial year.

Besides, Rao said, the bank has sold some of the non-core assets including sale of its holding in UTI Mutual Fund.

Going forwards, he said, the bank expects to mobilise Rs 500 crore from sale of real assets by June 2021.

PNB on Friday reported a standalone net profit of Rs 506.03 crore for the December quarter on the back of a reduction in bad assets.

It had posted a net loss of Rs 492.28 crore in the year-ago period.

Total income in the quarter under review rose to Rs 23,298.53 crore as against Rs 15,967.49 crore earlier.

On the outlook, Rao said, the bank expects to close the current financial year with annual profit of Rs 2,000 crore.