Dena Dividend Fails To Impress

At the first annual general meeting of Dena Bank, shareholders expressed disappointment over the fact that the share was quoting at a discount to the issue price and the paltry 12 per cent dividend recommended by the board of directors.

Addressing shareholders, Ramesh Mishra, chairman and managing director, Dena Bank, said the bank should post impressive results in the first half of the current fiscal.

"At a time when spreads in the banking industry have come under pressure, our strategy is to concentrate on volumes, he said. The bank recorded not only a positive deposit growth in the first quarter but advances have also increased, Mishra added.

 

As on July 17, deposits had increased by Rs 501 crore while advances rose by Rs 188 crore. In fact, if one includes investments in non-convertible debentures too, then advances have climbed by Rs 343 crore.

Responding to a demand of the shareholders to have their representative on the board Mishra said that at the moment regulations did not allow such a possibility. "If the necessary permissions come through, then it should be possible to consider their request, he added.

Referring to the shareholding pattern, Mishra said foreign investors held 14,400 shares. The banks and the financial institutions have also increased their stakes in the bank since the public issue, he added.

Dena Bank 's operating profit went up by 33.4 per cent to Rs 194.04 crore and its net profit jumped by more than 41 per cent to Rs 72.91 crore.

Mishra pointed out that these figures were after providing for non-performing assets (NPA) and contingencies. He said the thrust in the current year would be on reducing NPAs.

Deposit growth for the banking industry as a whole in the last financial year was 16.1 per cent. In contrast the deposit base of Dena Bank grew by 21.4 per cent.

The bank also outperformed the industry by achieving a 21.4 per cent growth in non-food credit against the industry average of 10.1 per cent.