Dena open to mergers, acquisitions

Dena Bank, which is set to hit the capital market with its second public issue to raise additional capital of over Rs 80 crore in mid-January 2005, is bracing for inorganic growth through mergers and acquisitions.

Anil Khandelwal, chairman and managing director, Dena Bank, said: "Indian banks are in a consolidation mode and several of them have rationalised their branches and organisational structure. We are dressing up for consolidation and will look for mergers and acquisitions after the public issue." He, however, refused to divulge the name of the bank, with which the bank is eyeing a merger.

According to industry sources, with the central government's positive signal for consolidation, Dena Bank may be merged with Bank of Baroda (BoB) if the latter is not merged with Allahabad Bank.

With the second public Issue of Rs 80 crores, the bank plans to improve its capital adequacy ratio to about 12 per cent by March, 2005. As on March 31 this year, the ratio was 9.48 per cent against nine per cent prescribed by the Reserve Bank of India (RBI).

The bank would issue eight crore shares of Rs 10 each with a price band of Rs 23 to Rs 27 and would net Rs 200 crore.

"The bank has registered a remarkable turnaround in the shortest span of time. The impressive performance in the last three years has been largely due to initiatives to reduce cost of deposits and recover non-performing assets," said Khandelwal.

In 2004 - 05, Dena Bank plans to open about 15 branchest.