PNB to spend $18-20 mn to acquire Dana bank
Chandigarh: Public-sector lender Punjab National Bank on Tuesday said it will complete acquisition of Kazakhstan-based Dana bank this fiscal for a consideration of USD 18-20 million.
"We hope that total outlay involved in buying the 63.64 percent stake in Dana Bank will be about USD 18-20 million...and we hope the bank (Dana) will come into PNB's fold by March 31, 2010," PNB Executive Director Nagesh Pydah told reporters here today.
Asserting that the bank intended to acquire majority stake in Kazakh bank at par and not at premium, Pydah said acquisition of Dana bank would also allow PNB to penetrate in CIS (Commonwealth of Independent States) countries as well.
He informed that Dana bank has five branches with a total business size of USD 60 million.
PNB has already started giving training to its staff to be deputed in branches of Kazakhstan bank to learn Russian language to enable them to communicate in native language.
"We have already started imparting training in Russian language to our staff as most of the local people communicate in this language in Kazakhstan," he said.
Pydah said the bank expects to complete the due diligence within next ten days.
PNB has targeted to increase the share of business overseas from 3 percent of Balance sheet to 20 percent by 2013, he said.
Noting that most of its high cost deposits taken at 9-10 percent rate of interest has retired, PNB' ED said the bank will maintain healthy Net Interest Margin (NIM) of 3.51 percent this fiscal.
"Our high cost deposits have been retired, moreover share of lending on Sub PLR has drastically come down from 67 percent to 38 percent this...such steps will improve NIM of the bank," he said.
PNB is eyeing deposits and advances growth of 25 and 22 percent respectively with total business mix of Rs 4,60,000 crore by the end of current fiscal. It also plans to open 100 more branches by the end of this fiscal. Presently, it has 4,964 branches in the country.
PNB has also tied up with Malta based FIM bank for launching factoring services for SME which is expected to rolled out within current fiscal. It would provide factoring, forfeiting and other trade finance related business.