Punjab National Bank (PNB) Plans to Increase Rs.7000 crore via Qualified Institutional Placement in December
On Tuesday, the banking and financial service bank owned by the government of India ‘Punjab National Bank’ said it is planning to boost Rs.7, 000 crore through share sales next month to hold-up its capital base for meeting business plans. The country’s second-largest public sector bank is looking forward to the credit growth to pick up slightly in the second half but it would be less than 5 per cent for the entire fiscal or revenue.
In a virtual interaction with the media, the Punjab National Bank (PNB) managing director S S Mallikarjuna Rao said that the bank has already taken acceptance from the board for raising Rs.14000 crore by way of Tier II, Additional Tier 1 bonds and Qualified Institutional Placement (QIP). He said by adding that we have raised Rs.2500 crore and remaining Rs.1500 crore with an additional Rs.3000 crore from the additional tier 1 bonds that will be turned-up before 30 November.
However, with the fund or investment mobilization, the capital-to-risk-weighted assets ratio, which was at 12.8 per cent at the end of the September 2020 quarter and would increase to 13.5-14 per cent.
Besides, the Punjab National Bank also said that it has chosen to introduce Rs.600 crore in its mortgage arm PNB Housing Finance through rights issue subject to RBI (Reserve Bank of India) acceptance. Also, the bank is expecting Rs.8000 crore from the resolution cases before the National Company Law Tribunal.
The Company’s Chief said, with regarding the credit growth that it should be 4-6 per cent in the second half but the annual growth should be around 3-4 per cent in 2020-2021 and the deposit growth would be 4-6% in the current fiscal.
Furthermore, the PNB was having a surplus liquidity of Rs.30000-32000 crore as deployment opportunity was muted during the first half due to the (covid-19) lockdown.