PNB in talks to buy Bangla bank

Punjab National Bank (PNB) is set to acquire management stake in a Bangladesh-based bank, besides opening more branches overseas.

"There are one or two opportunities available with us for equity participation in the banking sector in foreign countries, including one in Bangladesh," chairman and managing director S C Gupta told reporters here on Saturday.

While declining to name the Bangladesh bank, Gupta said, "Talks are at an early stage. But if all conditions are met, we will take management control with whatever stake is available."

PNB has already picked up a 20 per cent stake in the Everest Bank of Nepal and was "exploring such opportunities" in other countries.

Besides, in a bid to increase its international presence, the bank has also opened a branch in Kabul and four representative offices in the UK, China, Kazakhstan and Dubai.

"The board has approved few more foreign branches in Singapore, Hong Kong and Canada. We are awaiting approval from Reserve Bank of India and the host countries," he said.

"We want at least one full fledged branch to be operational by March, 2006," he added. Gupta also said the bank was looking forward to starting its operations in Hong Kong because there was huge business opportunity there.

Meanwhile, PNB, which has entered into a joint venture with Principal AMC of US for marketing life and non-life insurance products, was awaiting the Insurance Regulatory Development Authority's approval for its foray into insurance with Berger Paints, Vijaya Bank and Principal.

"We have already obtained RBI's approval and are awaiting Irda's nod for starting our insurance business. We expect to start the venture by this fiscal," Gupta said.

Gupta said the bank was expecting a 20 per cent growth in business this year over Rs 1,63,000 crore achieved last year.

On non-performing assets (NPAs), he said the gross NPA level was expected to decline from 5.96 per cent in 2004-5 to 4.50 per cent by 2005-06.

PNB's credit-deposit ratio was also expected to increase from 59 per cent to 63 per cent by this fiscal as the bank was taking measures for better credit delivery.

"Margins were under pressure owing to a decline in treasury income which we hope to compensate through improved C-D ratio, timely deployment of resources, and better recovery of NPA."

About PNB Gilts, Gupta said the company performed well in the first quarter and would focus on expanding its merchant banking operations.