‘International banking is going to be a very clear focus for us’

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: K R Kamath, who recently took over as chairman and managing director of state-owned Punjab National Bank (PNB), says that international banking will be a very clear focus for the bank. Before joining PNB, he was the chairman and managing director of Allahabad Bank. In the quarter ended September this year, PNB registered 31.1% growth in net profit at Rs 927, which was fuelled by higher interest and treasury income. Kamath in an exclusive interview with FE’s Simran Arora, talks about the bank’s expansion plans, interest rates and credit growth. Excerpts:

How are you looking at expanding your operations abroad?

International banking is going to be a very clear focus for us. To expand our presence in central Asia, we are acquiring a controlling stake in a Kazakhstan-based bank, Dana Bank. Soon, the bank is opening a joint venture bank in Bhutan and a branch at Dubai International Finance Centre in UAE. The bank has also received RBI’s approval for setting up a subsidiary at Vancouver and to upgrade our representative office at Shanghai to a branch.

How much stake are you planning to acquire in Kazakhstan-based Dana Bank? And what is the status?

We are acquiring 63.64% stake in Kazakhstan-based Dana Bank, which is subject to regulatory approval by Reserve Bank of India. Our board has already cleared the proposal and we are approaching RBI for this.

What is the size of Dena Bank ?

It is a five-branch operation. There will be a lot of bilateral trade between India and Kazakhstan. Since the economy in that country is under pressure, it gives us a good opportunity to take a controlling stake in the bank. The deal size is expected to be $24 million.

What are your financial expectations in the next few quarters?

There has been a robust growth in our normal business. The business has grown by 25% on the deposited advances. Compared to other public sector banks, our growth has been around 18%. Of course, there has been some opportunity available in the treasury, which we are used to. But we have used this extra money, which was available through treasury to add value to the balance sheet. Our provision coverage ratio has gone to 91.11%.

What are your plans about opening branches in Pakistan and the US?