In a major move to meet capital requirement to open new branches, one each in Canada, UK, Hong Kong and Singapore and other purposes, Punjab National Bank board has given approval to reduce government holding in the public sector bank from current 57.7 per cent to 51 per cent, said the bank’s CMD S.C. Gupta. The bank may come out with a follow up issue within a year.Announcing a 16 per cent growth in profits to Rs 429.9 crore, Gupta said, “Profits may see a hit in the last quarter because of the hike in repo rate by 25 basis points and increase in provisioning in commercial loans, real estate lending beyond Rs 20 lakh, and exposure to capital markets from 1 to 2 per cent. We hope to end this year with the stipulated target of Rs 1,650 crore as profits, of which Rs 1,302 has been achieved till third quarter, added Gupta.On RBI’s hike in repo rate, Gupta said this will increase costs and lending rates, but it will depend on banks as to whether they raise it or not. PNB increased its PLR by 25 basis points on January 1, and it will review its position after 10-15 days. Gupta also pointed out that inflation, which is standing at 6 per cent, may not come down before March as prices of food articles are at high levels.
