PNB plans to dilute stake in subsidiaries

"We will be selling a part of our shares in PNB Gilts and PNB Housing if we get an appropriate price from a potential buyer, including from overseas companies," said K C Chakrabarty, chairman of the bank. PNB Gilts is a listed company, while PNB Housing is a wholly owned subsidiary. It is likely that the bank will induct a joint venture partner in the housing company to fund its expansion. PNB also plans to sell up to 10 per cent of the 25 per cent stake it holds in UTI Asset Management Company. "These (stake sales) could happen in this financial year," Chakrabarty added.

The bank, which will announce its fourth quarter numbers tomorrow, expects to maintain healthy profit margin in 2008-09. The bank was confident of meeting the annual net profit target for 2007-08, Chakrabarty said after inaugurating microfinance branch here. He had earlier said the bank will record a 18-20 per cent net profit growth in 2007-08.

On interest rates, Chakrabarty said the outlook remains stable for the near future and the bank has no plans to revise deposit and lending rates.

"There is no question of cutting deposit rates. We'll be able to protect our net interest margin at 3.5-3.6 per cent," he said. Though cash reserve ratio was further enhanced by 25 basis points on April 29, the RBI left all key rates untouched.