Public sector lender Dena Bank has pegged additional tier I capital of Rs 4,600 crore under Basel III norms to support asset base of Rs 1, 70,000 crore by March 2017.
The business (deposits plus loans) has grown by 27% year on year in last two years. The compounded annual growth for loans in FY13-Fy17 period is estimated at 25%. The total business is expected to of Rs around Rs 4,00,000 crore by end of 2016-17.
Ashwani Kumar, chairman and managing director, Dena Bank said at present bank’s business is of Rs 1, 50,000 crore with net worth of Rs 4,600 crore and CRAR of 12%.
The maximum of amount of additional capital should come from the profits in next five years, he said.
“Rest we will have to come from the government and we need to show the performance first and only then we can expect adequate capital support from the government” added Kumar.
Dena Bank’s capital adequacy ratio (CAR) was 12.05% as of September 2012 with the tier-1 capital of 8.1%. It expects to maintain an overall capital adequacy of 13% with CAR I of nine%.
Dena Bank will announce the the results for December quarter on January 30.
Kumar said Mumbai-based bank has asked for Rs 1,250 crore capital support from the government for 2012-13 and 13-14.
Government will soon come up with the second round of capital support for this year in next few days. It recently announced capital infusion of Rs 12,517 crore for some government banks. Budgeted amount for capital infusion in banks in 2012-13 was Rs 15,000 crore.