Dena Bank scales down credit growth target to 16%

State-owned Dena Bank has lowered its loan growth target to 15-16 percent from the earlier estimate of 18 percent due to slow economic growth. "When we started the year (2013-14 fiscal), we had set credit growth target of 18 percent. But, as the year progressed we had to revise it down to 15-16 percent because of lower than expected pick up in credit," Dena Bank Executive Director Ashok Dutt told PTI.

Also Read: Dena Bank to raise Rs 600 crore through QIP

The demand from the corporates have been slow, he said, adding that the bank is expecting demand pick-up from retail, agriculture, exports. Besides, the bank is giving thrust on credit to MSME sector, Dutt said. In 2012-13, it had witnessed 16.27 percent growth in credit to Rs 66,456.88 crore, as against Rs 57,159.20 crore outstanding at the end of March 2012.

Dena Bank is planning to raise Rs 600 crore through qualified institutional placement (QIP) after it receives capital infusion from the government. "Government's share in our bank is 55.25 percent and maintaining the government share at the same level, we will raise QIPs which should be around Rs 600 crore, depending on the price we get," Dutt said.

The bank's capital adequacy ratio is at 10.21 percent. For the second quarter ended September, 2013-14, the bank reported 55.19 per cent decline in net profit at Rs 107.38 crore, on account of higher provisions. The bank's profit stood at Rs 239.64 crore in the July-September quarter of the previous fiscal, 2012-13. The bank's provisions increased to Rs 266 crore during Q2, 2013-14.