Dana Bank was in dire need of foreign funds to meet its capital adequacy requirements and thus we could acquire it at a lucrative price, said Dhawan.
Earlier, FE had reported on September 9 that PNB, having its overseas operations through subsidiaries, would soon go for its first international buy-out in Kazakhstan. PNB will be the first Indian bank to have a branch there through its new acquisition. PNB also operates a representative office in Soviet-era Kazakh capital city of Almaty since 1988.
We are waiting for the approvals pertaining to this deal from the Reserve Bank of India and the Kazakh regulator. Its likely to take three to six months.
Kazakhstans financial regulator, Agency of the Republic of Kazakhstan, in the current year had revised the minimum capital requirements for banks operating in the country. As per the new norms, its mandatory for the local banks to adhere to a minimum capital requirement of $37 million from October 1, 2009. Yelena Bakhmutova, chairman of the Financial Supervision Agency of Kazakhstan, recently classified Dana Bank in the risk zone assessing its capital adequacy status.
Besides expanding in Kazakhstan, PNB has also earmarked $12 million and $8 million to float a subsidiary in Canada and open a branch in Norway, respectively, in the next fiscal. The bank is also eyeing an acquisition in Indonesia.
PNBs reserves, excluding revaluation reserves, stood at Rs 13,731 crore as on March 31, 2009. The banks eight overseas branches generated around $12 million profit in 2008-09. PNB International Ltd (UK), PNBs latest foreign venture, contributed around 30% share to the banks overseas profit in the last fiscal.