Pnb Plans Non-Life Insurance, Card Foray

Punjab National Bank (PNB) yesterday said it plans to diversify into non-life insurance and credit card business through separate firms, and hoped to make its maiden public issue during the second half of the current financial year.

PNB's recently appointed chairman and managing director S S Kohli yesterday told a press conference that the bank has initiated talks with several foreign insurers for a joint venture in the non-life insurance business. "We are talking to a number of foreign companies for a non-life insurance joint venture," Kohli said.

Kohli added that negotiations are in final stages for a joint-venture partner for a new credit card company. "A final decision on selection of the partners would be taken soon," he said.

 

PNB has floated several subsidiaries including PNB Gilts, a leading primary dealer, and PNB Asset Management Company.

PNB is also one of the banks which qualify to meet the guidelines of the Reserve Bank of India to undertake insurance business in the country. However, unlike other PSU banks, PNB is considering a non-life insurance foray.

On the long pending public issue, Kohli said details on pricing and exact amount of the issue will have to be worked out. He said the restructuring of the bank with the help of consultants Boston Consulting Group and the Tata Consultancy Services is progressing well.

Addressing the first press conference after taking charge of PNB as CMD last month, Kohli said the bank has also decided to come out with the public issue with fresh issue of shares with face value of Rs 90-100 crore in the next six months.

In addition to new initiatives, Kohli said the bank would go aggressively on the computerisation drive with investment of Rs 125 crore this year as per the recommendations of Tata Consultancy Service.

On the operations of bank's business, he said the deposits grew by 15.3 per cent to Rs 47,000 crore and advances by 18.5 per cent to Rs 23,700 crore in 1999-2000 and this growth in deposits and advances was much above the industry growth of 13.5 per cent an 16 per cent, respectively.

On the overall financial performance of the bank in 1999-2000, Kohli said it would be better than 1998-99 but the exact figure will be known only in the first-second week of June.

For the current fiscal, Kohli said PNB has set a target of Rs 55,000 crore for deposits and Rs 29,500 crore for advances.

On the various subsidiaries of PNB, Kohli said PNB Gilts would come out with public issue next month at price ranging between Rs 26-31 per share with total issue size being Rs 105 crore.