<article>State-run <a style="color: #000080;" href="http://www.denabank.co.in/" target="_blank">Dena Bank</a> has received board approval to raise funds from the equity market by diluting the government’s stake to 52% from the current 65%, the bank announced in a filing to stock exchanges.</article>

State-run <a style="color: #000080;" href="http://www.denabank.co.in/" target="_blank">Dena Bank</a> has received board approval to raise funds from the equity market by diluting the government’s stake to 52% from the current 65%, the bank announced in a filing to stock exchanges.
Besides the stake dilution, the bank also plans to raise capital through additional tier-I bonds of up to Rs.1,500 crore in one or more tranches. It will also raise capital through tier-II bonds up to Rs.1,000 crore, the lender said.
The lender’s capital adequacy ratio was 11.22% as on 30 September with tier-I ratio being 8.19% under Basel-III norms. Basel norms, tailored for Indian banks, mandate a minimum capital adequacy ratio of 9%.
Dena Bank’s non-performing loans have increased by a massive 31% on a net basis over the last four quarters, and setting aside provisions for the same, have dented the bank’s profits. The bank reported a 24.85% fall in its net profit of Rs.38.76 crore in the quarter ended 30 September, compared with Rs.51.58 crore in the year-ago period. Gross non-performing assets (NPAs) as a percentage of loans have increased to 6.84%. Net NPAs stood at 4.65%.
Dena Bank is not alone in this respect as most public sector lenders have witnessed a sharp fall in profits due to rise in bad loans.
In banks where the government has a high stake, it has allowed them to dilute its shareholding to 51% in order to enable them to raise capital. Public sector lenders have been hamstrung in raising much needed capital amid rising bad loans that have erased profits to a large extent. The law mandates a minimum government holding of 51% in public sector banks.
In August, the government detailed a plan to revitalize the banks by helping them bring down bad loans and get more capital. Under the plan, the government said it would infuse Rs.70,000 crore equity into lenders over four years to boost their capital base under Basel norms. Out of this, Rs.25,000 crore would be infused in 2016-17.
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<h4>This article was first published on <a style="color: #000080;" href="http://www.livemint.com/Industry/iBQqNDGE5O9qrzXAgW0WrK/Dena-Bank-gets-board-approval-to-dilute-govts-stake.html" target="_blank">Livemint.com</a></h4>

State-run Dena Bank has received board approval to raise funds from the equity market by diluting the government’s stake to 52% from the current 65%.

India: Dena Bank gets board approval to dilute government's stake to 52%

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India: Dena Bank gets board approval to dilute government's stake to 52%

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