PNB to bring out IPO, raise Rs 500 cr as Tier II capital

New Delhi, May 23 (UNI) Punjab National Bank Chairman S C Gupta today announced that the bank will raise Rs 100 crore as Tier II capital before June 30, 2007 and hinted that it will come out with an IPO later this fiscal to reduce government equity in the bank from 57,8 per cent to 51 per cent.

Mr Gupta told newspersons here that he has the permission of the Board to bring down government equity to 51 per cent and also to raise Tier 11 capital. However, due to the comfortable situation of the Capital Adequacy Ratio, which stands at 12,29 per cent, there has so far been no need to enhance the capital base.

However, there was now the likelihood of raising capital through the IPO route as capital was now required in a greater measures on several counts. This includes ambitious plans for overseas acquisitions, risk weightage going up and meeting of Bassel 11 norms.

Mr Gupta, however, stated that the money required would be raised in the domestic market and that the bank has no plans to borrow from foreign markets.

Mr Gupta said government equity cannot go down below 51 per cent and thus the next issue would be the last public issue which the bank will bring out.

The CMD, however, said the timing of the Public Issue and other details would be worked out during the course of the year.

Giving details about the plans for overseas expansion, Mr Gupta said the bank has recently opened a branch in London and has finally got a license to open a branch in Hong Kong. This will be done before July 31, 2007.

Mr Gupta said the Bank would soon be able to open branches in Canada and Singapore, because clearences are in advanced stages.

UNI