Dena Bank expects infusion of Rs 900 cr

State-run Dena Bank expects a capital infusion of Rs 500 crore by September this year and another Rs 400 crore in 2010-2011.

“We have made a request for Tier-I capital worth Rs 500 crore to the government. It has given us an in-principle approval. We will receive Rs 300 crore by way of preferential shares and Rs 200 crore by way of perpetual non-cumulative preference shares. We have also approached the government for infusion of Rs 400 crore in 2010-2011,” DL Rawal, chairman and managing director, Dena Bank, said on the sidelines of a banking conclave organised by the Federation of Indian Chamber of Commerce and Industry (Ficci).

The capital adequacy ratio of the bank was 12.07 per cent on March 31, 2009.

On a year-on-year basis, the bank reported credit growth of 23 per cent in the April-June quarter. “Credit growth in the first quarter has been slow but we expect it to pick up by August-September,” he said.

This financial year, the bank expects about 20 per cent growth in credit and deposits. It is also expecting a net interest margin (NIM) of 2.75 per cent by the end of the current financial year.

“Our NIM has remained almost flat on a quarter-on-quarter basis at 2.5 per cent during the first quarter of this fiscal,” he said. The bank’s NIM was 2.91 per cent in the year ended March 31, 2009.

On interest rates, he said there might be an upward pressure in the next three-to-six months.