| The Delhi-based Punjab National Bank (PNB) will maintain status quo on its 74.07 per cent holding in its primary dealership subsidiary PNB Gilts till March 31, 2007.
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| The bank had earlier said it might offload a portion of its stake in the subsidiary.
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| PNB Chairman and Managing Director S C Gupta said the subsidiary had reported profits in the second quarter of 2006-07.
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| He said in the present market scenario the bank did not want to make any changes. So, Gupta added, the decision whether to divest some stake in the subsidiary will be taken only in the next financial year.
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| PNB Gilts reported a net profit of Rs 29.8 crore during July-September 2006, after recording losses in the previous quarters.
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| The CMD also indicated that the bank might not mobilise further tier-II capital in the current financial year. “We are in no hurry to raise capital as Basel-II norms will be applicable only in 2008. We will take a decision in the first week of February,” he said.
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| PNB already raised Rs 2,500 crore from the bond market vis-a-vis the earlier announced plans of raising Rs 3,000 crore tier-II capital in 2006-07.
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| Meanwhile, the bank is chalking out a roadmap to expand its overseas operations. Its board will form a special committee to help expand its foreign operations. The committee, to be in place by March this year, will put forward a gameplan by April 30.
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| The bank is set to start overseas operations of its subsidiary in London and Ottawa (Canada) and an offshore banking unit in Singapore by June 30.
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| “Over the next two to three years, we will make more inroads into our international business. As our clients remain bullish and go for more acquisitions abroad, overseas branches will help us fund and service them better,” Gupta said.
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| The bank will file an application announcing its plans with the office of the superintendent of financial institutions in Ottawa within January 31.
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| It has also approached the financial services authority in the UK to upgrade its representative office in London into a wholly-owned subsidiary. The Reserve Bank of India has already cleared the proposals.
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| An application has also been filed with MAS Singapore for an offshore banking unit and with the Hong Kong Monetary Authority to set up a branch in Hong Kong.
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| The bank had gross non-performing assets (NPAs) of 5.96 per cent in March 2005, which has become 4.1 per cent now. It targets to reduce the NPAs to 3.5 per cent by March this year.
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| The bank’s total business stood at Rs 2.19 lakh crore as on December 31, 2006. Gupta said PNB would surpass the target of Rs 2.25 lakh crore by March 31 this year to touch the Rs 2.28 lakh crore mark. |
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