Dena Bank posts higher net profit in Q3 at Rs 187 cr

Dena Bank on Monday reported a 20 per cent growth in net profit at Rs 186.68 crore for the third quarter ending December 2011, as against a net profit of Rs 155.21 crore in the same period of last fiscal.

The total income of the bank rose to Rs 1,810.21 crore during the quarter under review from Rs 1,417 crore in the corresponding period a year ago, Dena Bank said in a filing to the BSE.

The bank made provisions of Rs 124 crore in the third quarter, an increase of 45 per cent from Rs 85 crore in a year ago quarter.

Interest income rose to Rs 1,676.24 crore during the December quarter, up 30 per cent from Rs 1,289.89 crore in the year—ago period.

Shares of Dena Bank ended up 8.57 per cent over previous close to Rs 79.80 on the BSE.

Government to interview executive directors for bank CMD post on January 12

MUMBAI: The appointments committee is slated to interview candidates for the CMD post at government owned banks on January 12. Earlier the interviews were fixed on January 4.

The appointment's committee includes D K Mittal, secretary, department of financial services and deputy governor of Reserve Bank of India Anand Sinha among others.

Ten executive directors of public sector banks will be considered for CMD post at six banks.

These candidates include S.S. Mundra from Union Bank of India, R V Iyer and Rajiv Dubey from Central Bank of India, Ashwini Kumar of Corporation Bank, Archana Bhargava from Canara Bank, V Kannan from Oriental bank of Commerce, Rajeev Rishi from Indian Bank, Rakesh Sethi from Punjab National Bank A K Datt of Dena Bank and Ms Subhalakshmi Panse of Vijaya Bank.

The candidates are being selected to fill vacancies in fiscal year 2012-13 in Bank of Baroda, Bank of India, Canara Bank, Dena Bank, Allahabad Bank and United Bank of India.

Sources from the industry say that on January 13 the appointments committee will interview 42 general managers for the executive directors post.

Source: EconomicTimes

SBI, Dena Bank up interest rates for NRE deposits

State Bank of India on Tuesday hiked interest rates on Non-Resident (External) Rupee term deposits by up to 5.74 percentage points.

Following the revision in NRE deposit rates by India's largest bank, other public sector and private sector banks are expected to follow suit.

Beginning January 1, India's largest bank will pay a uniform 9.25 per cent interest on NRE deposits (below Rs 1 crore) of all maturities. It has also increased the highest tenor for NRE term deposits from 5 years to 10 years.

Currently, retail NRE term deposits in the 1 year to less 2 years maturity bucket fetches 3.82 per cent interest; 2 years to less than 3 years (3.51 per cent); 3 years to less than 5 years and 5 years (3.64 per cent each).

In a statement, the bank said no interest is payable if the deposit is withdrawn before one year. In other cases of premature withdrawal, the interest paid will be 0.5 per cent below the rate applicable for the period the deposit has remained with the bank or 0.5 per cent below the contracted rate, whichever is lower.

Dena Bank too hiked the interest rate on NRE term deposits to 9.60 per cent for one year maturity and 9.25 per cent for maturity period ranging from above 1 year and up to 3 years.

The bank said:-

In terms of returns, NRIs will find NRE deposits beneficial. We plan to double our NRI deposit base to Rs 600 crore by March-end 2012,” said Mr SK Jain, General Manager, Dena Bank. He explained that if a NRI opens an NRE deposit at the current rupee-dollar exchange rate of 53 to the dollar (he gets more rupees for his dollar) and one year down the line, say, the domestic currency appreciates to 49 (he pays less rupees to buy dollars for repatriation) then he gains not only in terms of interest but also in terms of favourable currency movement.

On Monday, Punjab National Bank said it will increase the interest rate on NRE term deposit to 9.25 per cent for period ranging from 1 year to 5 Years with effect from January 1.

NRE Rupee deposits accounted for around 48 per cent (or $25 billion) of the total Non-Resident Indian deposits of $52 billion as on October-end 2011.

NRE account can be in the form of savings, current, recurring or fixed deposit accounts. Such accounts can be opened only by the non-resident himself and not through the holder of the power of attorney.

Balances held in the NRE account are freely repatriable. Further, accrued interest income and balances held in NRE accounts are exempt from Income tax and Wealth tax, respectively.

Loans up to Rs 1 crore can be extended against security of funds held in NRE Account either to the depositors or third parties. Such accounts can be operated through power of attorney in favour of residents for the limited purpose of withdrawal of local payments or remittances through normal banking channels to the account holder himself.

Govt to interview 10 EDs for banks CMD post on January 4

MUMBAI: The appointments committee will interview executive directors of ten public sector banks on January 4, 2012 for CMD post in six banks.

The ten candidates called for the interview include S.S. Mundra from Union Bank of India, R V Iyer and Rajiv Dubey from Central Bank of India, Ashwini Kumar of Corporation Bank, Archana Bhargava from Canara Bank, V Kannan from Oriental bank of Commerce, Ravi Chatterjee from Syndicate Bank, Rajeev Rishi from Indian Bank, Ashwani Kumar from Corporation Bank and Rakesh Sethi from Punjab National Bank.

The candidates are being selected to fill vacancies in fiscal year 2012-13 in Bank of Baroda, Bank of India, Canara Bank, Dena Bank, Allahabad Bank and United bank of India.

Meanwhile, the government has yet to issue notification for the post of executive director in bank like Indian Overseas Bank and Andhra Bank, Even as the candidates names have been cleared.

Source: EconomicTimes

Government clears creation of new ED slot in public sector banks

KOLKATA: Large state-run lenders like Bank of Baroda and Punjab National Bank will get a third executive director (ED) on their board from next April, while smaller banks like Dena or United Bank will get their second ED.

The government has just cleared the Khandelwal Committee's recommendation to this end, two chief executives at state-run banks said. Banks with more than Rs 3 lakh crore business are considered as large entities.

The government has created the new slot in six large banks and said the third executive directors will be responsible for human resource development and technology.

Bank of India, Canara Bank, Central Bank of India and Union Bank of India are dubbed as large banks and will benefit from this move. This is in step with the director-HR position that exists in public sector undertakings like ONGC, Indian Oil, HPCL or BPCL.

"Creation of the ED position for HRD is an important step in the banking industry as this will help in bringing human resource development under board's direct attention," said AK Khandelwal, who headed the HR reform panel and submitted a series of recommendations in June 2010.

The government has also created a second executive director's position in five small banks having a business of less than Rs 1.5 lakh crore. Bank of Maharashtra, Dena Bank, Punjab & Sind Bank, United Bank of India and Vijaya Bank fall in this category and their second ED will also be responsible for HRD and technology. All these banks have one ED at their top deck at present.

Source: EconomicTimes

Dena Bank to grow balance-sheet to thwart takeover bids

The mid-size public sector lender Dena Bank seeks to grow its balance sheet to ensure that it is not gobbled up by bigger banks, a top bank official said here today.

“The biggest challenge for Dena Bank is that we are one of the smallest. So, in the present environment, we have to go beyond a point to ensure that we are there in the future also,” the newly appointed Dena Bank Chairman and Managing Director, Ms Nupur Mitra, said on the sidelines of an IBA meet on innovation, risk and regulation here.

She also said the bank’s presence in Gujarat is making it more vulnerable for a possible takeover.

Ms Mitra said the public sector lender is taking various steps to increase its balance sheet size.

“Improvement in the balance sheet can be done through network expansion. At present, the bank’s network is tilted towards one State. We have to increase both our domestic as well as global presence,” she said.

The bank is also increasing its focus on SME sector lending for future growth.

About credit growth in the current fiscal, Ms Mitra said, “in the first half, the advances growth was almost flat. But we are looking at growth in the rest of this fiscal, especially in the SME sector. It will be around 20-25 per cent.”

The bank has not witnessed any rise in defaults despite the repeated rate hikes, she said.

About restructured portfolio, Ms Mitra said only 3-4 per cent of its asset is restructured and slippages from these restructured asset is nominal. She, however, said small banks are left out in the corporate debt restructuring process.

“In a CDR, the very spirit is getting violated as the small bank is left out in this process. As we are a small bank, we have a small exposure to the entity and we have to kind of toe the line of the big banks,” she said.

Dena Bank has reported 18 per cent rise in the second quarter net profit to Rs 193 crore compared to Rs 163 crore a year ago. The net income stood at Rs 515 crore, up 10.75 per cent against Rs 465 crore reported in the same period the previous year.

PSU banks want electricity boards to revise tariffs annually

MUMBAI, NOV 20:  Rising incidents of stressed assets in the power sector have prompted banks to ask for tariff revisions every year by the state electricity boards (SEBs), so that the business model remains viable.

“The SEBs have to increase their tariffs annually to pass on their increased cost to their end-users. Otherwise, the business model will be unviable,” Dena Bank executive director Mr A K Dutt told PTI here, adding the revision should be around 20 per cent annually.

In case of a possible debt recast for the SEBs, the public sector banks will ask for increasing the general level of efficiency, he added.

Currently, banks are worried about the advances extended to the SEBs of Tamil Nadu, Rajasthan, Uttar Pradesh, Bihar, Haryana, Madhya Pradesh and Punjab, which according to the rating agency Crisil, are the most vulnerable ones.

As per Crisil, losses of power distribution companies rose by 24 per cent to Rs 27,500 crore between 2006-07 and 2009-10 and it could rise to Rs 35,000-40,000 crore in 2010-11, mainly due to the problems the utilities are facing.

“Though we have some exposure to the Rajastan SEB, there is no request for debt-restructuring,” Mr Dutt said, adding the SEB has made some presentation to the Centre.

Recently, the second largest public sector lender Punjab National Bank, which had restructured Rs 2,500 crore of loans in the second quarter, said of this, Rs 1,800 crore were from the loan extended to the TNSEB

Another public sector bank, Indian Overseas Bank, too, said the bank is currently going slow in its lending to the power sector.

“We have less space to lend to the power sector, as the exposure to this segment is now at the mandated upper level. However, SEBs have to increase their efficiency and raise tariffs annually for any further lending from us,” IOB chairman and managing director Mr M Narendra said.

He also said, his bank has not received any request from any SEB for debt-restructuring.

Allahabad Bank freezes lending loans to power sector on increasing financial stress

MUMBAI: Financial stress to banks caused by the power industry increased with Bank of India set to restructure a quarter of its power loans and Allahabad Bank freezing lending to the sector whipsawed by losses at state distributors and hurdles to new plants.

Loans to Tamil Nadu Electricity Board and Rajasthan Electricity Board will be restructured - the tenor of the loans and interest payable will be changed - to avoid an imminent default and firewall banks from rising bad loans, senior bank officials said.

"We have received requests from one or two state electricity boards and we are looking into it," said Bank of India Executive Director BA Prabhakar. BoI has lent Rs 8,000 crore to various state boards. "We have yet not restructured. No one has defaulted yet."

The country's financial system is under stress because of mounting losses at state distribution companies and thwarted project clearances. Some projects, such as East Coast Energy - in which Goldman Sachs and General Atlantic are stakeholders, are stuck half way because of local protests.

Subsidised tariffs have pushed power distribution companies to the brink of collapse with losses soaring last fiscal by 45% to an estimated Rs 40,000 crore.

Allahabad Bank, which has lent more than Rs 13,600 crore to utilities and distributors, has stopped lending to the sector.

"In the past six months, we have not sanctioned a single fresh loan. Till things are clearer ... we don't want to go into this area," Allahabad Bank CMD JP Dua said.

Dena Bank and Indian Overseas Bank are also considering to restructure loans to the power sector. Punjab National Bank restructured Rs 2,500 crore of loans to power companies last quarter.

Source: EconomicTimes

Dena Bank aims to hit Rs 1.5 lakh cr mark by 2013

Public sector Dena Bank aims to achieve Rs 1.5 lakh crore business with a growth of 20% during this fiscal, according to a top bank official.

"We have set a target of Rs 1,50,000 crore by 2013," Dena Bank Chairperson and Managing Director Nupur Mitra, who assumed office today, said.

She said the bank reported 19.21% jump in total business at Rs 1,07,336 crore as of September 30, 2011.

On the outlook for this financial year, she said the bank would introduce gold loan and housing loans. "We plan to introduce gold loan scheme and housing loan. Already we have tied-up with 70-80 builders to sell [housing loans]," she said.

Besides, a revision of interest rates for savings bank accounts would be decided at the Asset Liability Committee meeting (ALCO), slated to be held this month.

She said the bank would lay special focus on Maharashtra and Gujarat as they have a significant presence there. "We have around 500 branches in Gujarat alone. With many auto majors, it is becoming a major hub," she said.

The bank has already opened 507 ATMs and aims to increase it to 757 by March 31, 2012, she said.

Source: Business Standard

Dena Bank Q2 profit grows 20.5% to Rs 194 cr

Dena Bank has reported a 20.51 per cent jump in net profit to Rs 194 crore for the second quarter ended September 30, 2011, from Rs 161 crore in the corresponding quarter last year.

“The bank has identified agriculture, MSME and retail as thrust areas for lending,” said Mr D.L. Rawal, Chairman and Managing Director of Dena Bank.

As on September 30, 2011, the bank's deposits grew 20 per cent to Rs 64,236 crore and advances were up 18 per cent to Rs 43,100 crore. The net interest margin fell to 3.22 per cent during this quarter from 3.52 per cent in the previous quarter.

On increasing savings bank rate, Mr Rawal said that the bank has enough liquidity, and there is no immediate plan to increase the SB rate. “It will depend on a combination of factors such as liquidity position and relationship with one's customers. But in one or two months, we will have to take a call,” he said.

The bank has recruited 564 officers in the area of credit, agriculture and forex and is in the process of recruiting about 600 clerks. The bank is planning to open 100 new branches during the current financial year.

Dena Bank further reduces interest rates on home, auto loans by 25 bps under festive offer

NEW DELHI: State-run Dena Bank today said it has further reduced interest rates on new housing loans and car loans by 25 basis points in the floating rate category, as a part of the festival offer.

Last month, the bank had announced a festival offer with 25 per cent discount on new housing loans and car loans.

The new rate would be effective from October 10, 2011, Dena Bank said in a statement.

Thus, the bank has reduced interest rates on floating housing loans and car loans by 0.50 per cent for the ensuing festival season, it said.

The benefit under festival offer will be effective from October 1 to December 31, 2011, it added.

In addition, to give further benefit to the customers, the bank will continue the reduction in the process fee on housing loans and car loans by 50 per cent. These reductions in rate of interest and processing fees will be valid upto December, 2011.

Dena Bank's base rate stands at 10.70 per cent. A bank official said the rebate depends on the quantum and tenure of the loan.

Its prevailing lending rate varies from 11.20-12.75 per cent in case of floating home loans, while for the fixed rate loans it varies from 11.50-12.75 per cent.

For auto loans up to three years, its interest rate is 13.25 per cent and for those above three years, it is 13.75 per cent, the official said, adding that the 25 bps discount will be applicable on these rates.

Source: EconomicTimes

Dena Bank launches 25-bps discount on home, auto loans till December 31

MUMBAI: On the heels of industry leaders launching special/discounted loans to tap festival sales, the mid-size state-run lender Dena Bank on Friday launched a loan mela of its own under which it offers a 25 basis points discount on new home and auto loans, besides halving the processing fee.

The benefit under festival offer will be effective from October 1 to December 31, 2011, the bank said in a release.

"Dena Bank has reduced the interest rates on new housing loans and car loans by 25 basis points on the card rate. To give further benefit to customers, we have also reduced the processing on new loans by 50 percent from the existing one percent," the bank said.

Currently Dena Bank's base rate stands at 10.70 percent. A bank official said the rebate depends on the quantum and tenure of the loan.

Its prevailing lending rate varies from 11.20 to 12.75 percent in case of floating home loans, while for the fixed rate loans it varies from 11.50 to 12.75 percent.

For auto loans up to three years, its interest rate is 13.25 percent and those above three years, it is 13.75 percent, the official said, adding the 25 bps discount will be applicable on these rates.

Source: Economic Times

Nupur Mitra to be next CMD of Dena Bank

The government has appointed Nupur Mitra as Chairman and Managing Director (CMD) of Dena Bank.

The notification of the appointment, to be effective November 1, 2011, has been released recently.

At present, Mitra is the Executive Director of the Chennai-based Indian Overseas Bank and will replace incumbent DL Rawal, who superannuates on October 31.

Mitra started her career with Bank of India in 1975 and served the bank in different capacities.

For the first quarter ended June, Dena Bank reported 21% jump in net profit to Rs 168.09 crore against Rs 138.79 crore in the same period a year ago.

Source: Business Standard

Government to sanction Rs 2,000 cr capital infusion for few banks

NEW DELHI: The government has decided to sanction Rs 2,000 crore to some public sector banks as part of its recapitalisation drive.

"We are in the process of sanctioning Rs 2,000 crore to a few public sector banks, but the the disbursement would take place at later date," official sources told PTI.

The mode of disbursement would be decided later, sources said, adding, the capital infusion would result in raising tier I capital or equity capital of the bank.

Besides, the capital infusion would result in enhancing government's stake in the select banks, sources said.

This is part of the Rs 6,000 crore re-capitalisation amount for the public sector banks announced in the Budget this year.

Finance Minister Pranab Mukherjee in his Budget speech had said, "During the year 2010-11, the government is providing a sum of Rs 20,157 crore for infusion in the Public Sector Banks to maintain Tier I Capital to Risk Weighted Asset Ratio (CRAR) at 8 per cent and increase government equity in some banks to 58 per cent".

"I propose to provide a sum of Rs 6,000 crore for the year 2011-12 to enable Public Sector Banks to maintain a minimum tier I CRAR at 8 per cent," he said.

Most of the public sector banks got capital support from the government during the last fiscal. These banks included Punjab National Bank, Bank of Baroda, Union Bank of India, Oriental Bank of Commerce, UCO Bank and Dena Bank.

In the first phase of recapitalisation in June last year, the government had approved capital support of Rs 6,211 crore into five banks. The banks, which had got capital from the government included Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank India.

Remaining Rs 13,946 crore was disbursed by March, 2011 through mostly preferential allotment of equity.

All the public sector banks have already submitted to the government their capital requirement.

The bank has requested the government capital infusion of Rs 990 crore to fund its business growth, Punjab & Sind Bank Executive Director P K Anand said.

"We have requested the government to infuse additional capital of Rs 990 crore by way of preferential shares," Anand

had said earlier this month.

Mangalore-based Corporation Bank has also sought Rs 300 crore capital support from the government.

Source: EconomicTimes