Dhanlaxmi Bank net falls 74.8%

Dhanlaxmi Bank has posted a 74.8 per cent drop in net profit to Rs 5.6 crore for the fourth quarter ended March 2010, as against Rs 22.25 crore in January-March 2009, due to an increase in operational expenditure. Net profit for 2009-10 dropped to Rs 23.3 crore from Rs 57.45 crore in the previous year. The bank’s board also recommended a dividend of 10 per cent for 2009-10.

Meanwhile, the Kerala-based private bank said it planned to raise equity capital of Rs 350-400 crore through the qualified institutional placement (QIP) route. The board approved issue of 21 million equity shares of the bank at a face value of Rs 10 each to qualified institutional buyers, according to Chief Financial Officer Bipin Kabra.

The private placement, to be completed by September 2010, will be aimed at augmenting the Tier-I capital base. Pricing will be decided close to the issue date, as per the norms of Securities and Exchange Board of India.

Kabra said the bank will use the capital to support business growth and expansion plans, while further strengthening its capital adequacy ratio (CAR). The CAR at end of March 2010 was 11.99 per cent, as against 15.38 per cent. The private sector bank’s total income increased from Rs 487.77 crore for the year ended March 31, 2009 to Rs 625.56 crore for the same period this year — up 28 per cent.